Northern Arc Capital (formerly IFMR Capital) has raised Rs 910 crore from IIFL Special Opportunities Fund & its Series managed by IIFL Asset Management Limited, SCPE (Standard Chartered Private Equity) and Affirma Capital, a newly formed, independent private equity firm to be managed by the team at SCPE.
Early investors including Dvara Trust, LeapFrog Investments and Accion will partially sell their stake in the company, but will however continue to stay invested. Following this investment, Amit Mehta, Principal, IIFL Private Equity will join the board of the company. Axis Capital, Credit Suisse and ICICI Securities acted as advisors to the transaction.
This investment almost doubles the net worth of the company. With this round of funding, the total equity raised by Northern Arc stands at Rs 1,400 crore. Northern Arc is a debt capital platform for financial institutions serving excluded individuals and businesses.
The fresh round of investment will help the company address the debt needs of a growing client base across sectors, including new-age financial institutions in sectors such as consumer finance and fintech. It will enable the firm to increase exposure to existing sectors, deepen client relationships and bolster product innovation. The transaction comes at an opportune time for Northern Arc and its clients, including the many NBFCs working at furthering financial inclusion, said the company.
Kshama Fernandes, Managing Director, and CEO, Northern Arc Capital said that this is a significant milestone for Northern Arc. The capital will allow the company to scale-up the existing business and pursue new opportunities.
The company will continue to invest in product development and technology, building on our knowledge, geographical reach, field insights, data-analytics and risk-modelling, added Fernandes.
Northern Arc Capital has been instrumental in enabling financial inclusion in India by providing entities that target low-income households and small businesses with critical access to debt capital markets. Till date, the company has enabled debt financing of around Rs 70,000 crore for its clients across microfinance, small business finance, affordable housing finance, vehicle finance, agriculture finance and corporate finance.
Over 125 investors (banks, asset managers, insurance companies, DFIs, private wealth etc.) have invested in transactions structured and arranged by Northern Arc Capital. The innovative financial structures designed by Northern Arc Capital have been a fulcrum in building institutional investors’ confidence and fueling their appetite to invest. Over the last year, the Company has introduced innovative new products in the market including Persistent Securitization (Persec) and Covered Bond.
Northern Arc Capital has over 160 employees in five offices across the country. Over a decade, the company has partnered with 180 plus clients to impact the lives of over 33 million customers across 580 districts of India. It has structured and executed over 500 capital markets transactions.