February 28, 2025 – In a significant financial development, Northern Arc Capital, a prominent non-banking financial company (NBFC), has successfully raised Rs 910 crore from IIFL, marking a substantial milestone for the organization. This infusion of capital is poised to strengthen Northern Arc Capital’s position in the financial services sector and fuel its ambitious growth plans as it continues to cater to underserved markets across India.
The funding comes at a pivotal time for Northern Arc Capital, which has been gaining attention for its robust performance and innovative approach to financial inclusion. The company, known for its focus on providing credit access to micro, small, and medium enterprises (MSMEs), as well as individual borrowers, has been steadily expanding its footprint. This latest capital raise from IIFL, a leading financial services conglomerate, underscores the confidence investors have in Northern Arc’s business model and its potential for sustained growth.
Northern Arc Capital has built a reputation for bridging the credit gap in India’s evolving financial landscape. By leveraging technology and a diversified lending portfolio, the company serves sectors such as MSMEs, microfinance, and consumer finance. The Rs 910 crore raised from IIFL is expected to bolster its lending capabilities, enabling it to reach more borrowers and deepen its impact in key areas of the economy. This move aligns with the broader trend of NBFCs playing an increasingly vital role in driving financial inclusion and supporting India’s economic growth.
The transaction highlights IIFL’s strategic focus on backing high-potential financial institutions that demonstrate scalability and resilience. Northern Arc Capital’s recent achievements, including its successful initial public offering (IPO) in September 2024, have further solidified its standing in the market. The IPO, which raised Rs 500 crore in fresh equity, was met with overwhelming investor interest, subscribing over 110 times. Following its listing, the company’s stock saw a strong debut, reflecting market optimism about its future prospects.
With this new funding, Northern Arc Capital is well-positioned to accelerate its growth trajectory. The company has outlined plans to utilize the capital to expand its loan book, enhance its technological infrastructure, and explore new opportunities in the financial services space. This includes strengthening its alternate investment fund (AIF) initiatives, such as the recently launched Finserv Fund, which targets a corpus of Rs 1,500 crore to support emerging entities in the financial ecosystem.
The financial services sector in India has witnessed a surge in activity, with NBFCs like Northern Arc Capital playing a critical role in meeting the credit demands of underserved populations. The company’s diversified approach, which spans multiple sectors and includes a cautious yet strategic focus on high-growth areas, has earned it praise from industry observers. Its ability to maintain strong financial metrics—evidenced by a 24% profit increase to Rs 98 crore in Q2 FY25—further bolsters its appeal to investors.
This Rs 910 crore funding from IIFL is expected to provide Northern Arc Capital with the resources needed to scale its operations while maintaining a disciplined approach to risk management. The company has emphasized its commitment to sustainable growth, with a focus on supporting MSMEs and other key sectors that drive economic activity. As India’s economy continues to evolve, such investments are seen as crucial for empowering businesses and individuals who lack access to traditional banking services.
The partnership between Northern Arc Capital and IIFL also reflects a broader trend of collaboration between NBFCs and financial institutions aiming to capitalize on India’s growing demand for credit. With this capital infusion, Northern Arc Capital is likely to enhance its market presence and deliver greater value to its stakeholders. The company’s leadership has expressed optimism about the road ahead, highlighting the potential to create long-term impact through this funding.
As of February 28, 2025, Northern Arc Capital stands at a critical juncture, armed with fresh capital and a clear vision for expansion. The Rs 910 crore raised from IIFL not only strengthens its financial foundation but also signals its readiness to take on new challenges in the competitive NBFC landscape. With a track record of innovation and performance, Northern Arc Capital is set to make waves in the financial sector, driving growth and inclusion in the months and years to come.
