About Company

• ncorporated on March 9, 1989, Northern Arc Capital Ltd (“NACL”) is a diversified financial services platform set up primarily with the mission of catering to the diverse retail credit requirements of the under-served households and businesses in India. The company has 3 primary channels: Lending, Placement and Fund Management.

• Since 2009, they have facilitated financing of over ?1.73 trillion that has impacted over 101.82 million lives across India, as of March 31, 2024. They are one of the leading players amongst India’s diversified NBFCs in terms of AUM as of March 31, 2024, with a business model diversified across offerings, sectors, products, geographies and borrower categories. Further, they have one of the lowest industry-wide credit costs amongst diversified NBFCs in India, as of March 31, 2024. 

• NRCL has developed domain expertise in enabling credit across their focused sectors in India, namely, MSMEs, MFI, Consumer Finance, Vehicle Finance, Affordable Housing Finance and Agricultural Finance. They have been operating in the MSME, MFI and consumer finance sectors for over 14 years, 15 years and 9 years, respectively. 

• Their in-house technology stack consists of:

• Nimbus, a curated debt platform that enables end-to-end processing of debt transactions;

• nPOS, a co-lending and co-origination technology solution based on application programming interfaces (“API”);

• Nu Score, a customised machine learning based analytical module designed to assist their Originator Partners in the loan underwriting process;

• AltiFi, an alternative retail debt investment platform. 

• Their quantitative analysis is based on over 3.52 crore data points which includes: (a) loan pools they have evaluated and invested in for their Originator Partners from the Investor Partners through securitisations and direct assignments, as of March 31, 2024, and (b) over 1.86 crore Direct to Customer Lending loans disbursed by them, as of March 31, 2024. 

• They have also conducted 12 rounds of equity fund raises (including issuances of CCPS) in the last 11 Fiscals which has allowed them to benefit from the capital sponsorship of a marquee set of equity investors.

Strengths

Competitive Strength 

• Large addressable and underpenetrated market with strong sectoral expertise;

• Large ecosystem of partners and data and technology platform creating strong network effects;

• Proprietary technology product suite transforming the debt market ecosystem;

• Robust risk management based on domain expertise, proprietary risk models and data repository driving asset quality;

• Diversified sources of funding for own deployment and proactive liquidity management;

• Professional management team supported by an experienced Board and marquee investors driving high standards of governance;

• Strong ESG Framework integrated into the business model with focus on creating sustainable impact and climate smart lending.

Business Strategies 

• Enhance the ecosystem by growing and deepening relationships with the partners, while leveraging and scaling up the technology products;

• Expand to adjacent sectors such as climate lending and gold loans, and enhance the ESG risk management systems;

• Expand the Fund Management channel;

• Continue to scale the Direct to Customer Lending channel to enhance risk adjusted returns

• Focus on credit quality to manage credit cost efficiently

• Continue to diversify the source of funds and widen lender base to scale the borrowing requirements

• Expansion through inorganic growth

Company Promoters

Company Financials

Northern Arc Capital Limited Financial Information (Restated Consolidated)

Northern Arc Capital Limited's revenue increased by 45% and profit after tax (PAT) rose by 31% between the financial year ending with March 31, 2024 and March 31, 2023.

Objects of the Issue

The company proposes to utilize the Net Proceeds to meet future capital requirements toward onward lending.