### **Overview** Northern Arc Capital Limited is a leading diversified Non-Banking Financial Company (NBFC) in India, registered with the Reserve Bank of India (RBI). Since its inception in 2009, the company has emerged as a key player in India’s financial inclusion landscape, focusing on underserved and financially excluded households and businesses. With over **16 years of domain expertise**, Northern Arc has facilitated **over INR 2.3 trillion in cumulative financing** across **691 districts in 28 states and 8 Union Territories**, impacting over **129 million lives** as of September 30, 2025. As of **September 30, 2025**, Northern Arc managed **INR 17,362 crore in Assets Under Management (AUM)** through its balance sheet and active Alternative Investment Funds (AIFs), reflecting a robust compound annual growth rate (CAGR) of **31% over the past three years**. The company operates on a **dual-channel business model**: 1. **Direct-to-Customer (D2C) Lending** 2. **Credit Solutions for Originator Partners** (via fund management, structured placements, co-lending, and SaaS platforms) This hybrid approach enables scalable, sustainable, and inclusive credit delivery across India’s retail financial ecosystem. --- ### **Key Business Segments** #### **1. Direct-to-Customer (D2C) Lending** Northern Arc’s D2C segment has grown rapidly, representing **50% of its total portfolio** by March 2024 and expected to remain a primary growth driver. It serves **over 1.67 million direct customers** through a physical and digital network. - **Consumer Finance**: - ~1.67 million digital customers - Quasi-secured loans: **INR 50,000 to INR 5 lakh** - AUM: **INR 3,652 crore** (as of Oct 2025) - **4-year CAGR (FY21–FY25): 121%** - Products include personal loans and vehicle finance with tenures of **12–48 months** - **MSME Finance**: - Tailored products: secured loans, working capital, supply chain finance, Loan Against Property (LAP) - AUM grew at a **19.2% CAGR from FY21 to FY25** - AUM: Significant contributor within overall D2C AUM of **INR 7,064 crore in FY25** - **Rural Finance (via Pragati Finserv Private Limited)**: - Subsidiary focused on rural and semi-urban India - Serves **over 500,000 customers** through **branch-led operations** - Unsecured loans: **INR 40,000–60,000 average ticket size** - AUM: **INR 910 crore** (Oct 2025) - Expanding into new geographies with greenfield branches in UP, Bihar, Jharkhand, and Karnataka - Flagship product: **Krushi JLG loan** for rural women; piloting **Shakti Graduate Loan (INR 75,000–1.25 lakh)** --- ### **Credit Solutions & Fund Management** Northern Arc supports financial institutions and fintechs through scalable credit solutions, generating **stable, recurring fee income**. - **Assets Under Management (AUM)**: - **Total AUM (as of Sept 30, 2025)**: **INR 17,362 crore** - **Lending AUM**: **INR 7,627 crore** (Direct + Intermediate) - **Fund Management AUM**: **INR 3,196 crore**, managed by **Northern Arc Investment Managers (NAIM)** - 6 active debt funds, 2 PMS strategies - Cumulatively deployed **over INR 12,000 crore** - All exited funds delivered **100% capital safety, zero loss, no extensions, on-time distributions** - **Investor Base**: - Over **1,000 clients** including HNIs, corporates, DFIs, family offices, offshore funds - Key investors: **IFC, LeapFrog, Affirma Capital, Eight Roads (Fidelity), Sumitomo Mitsui Banking Corporation, Accion, Dvara Trust** - **Fund Performance**: - Matured funds delivered **weighted average XIRR of 14.57%** - Targeting **sector-specific funds** with gross returns of **10%–17.5%** - **Placements Business**: - Facilitated over **INR 1 trillion in structured and syndicated placements** - Works with **200+ investor partners**, including banks, NBFCs, mutual funds, and global institutions - Net fee yield: **20–25 bps** --- ### **Technology & Innovation** Northern Arc is a **technology-first financial platform**, leveraging data and automation to enhance scalability, precision, and risk-adjusted returns. - **Proprietary Platforms**: - **Nimbus**: End-to-end curated debt platform enabling balance sheet and investor-led lending - **nPOS**: API-driven co-lending and loan origination platform with **7M+ transactions processed** - **NuScore**: Machine learning-based underwriting SaaS solution - Delivers borrower-level risk assessments and analytics - Sector-specific, customizable, cloud-based, API-integrable - Used by MFIs, NBFCs, SFBs, and consumer durables lenders - Processed **250,000+ assessments in FY24–25** - **AltiFi**: Digital fixed-income investment platform democratizing access to bonds, NCDs, and securitized assets for retail and small corporates - Registered **31,272 users**, INR **152 crore invested** in FY23–24 - **Digital Capabilities**: - End-to-end digital customer journey with **digital underwriting and STP (straight-through processing)** - Aryabhatta 3.0: Loan origination system reducing processing time to **<30 minutes** - Dhruva 2.0: Underwriting tool with **video-based personal discussions (PD)** - Data lake with AI/ML-driven analytics, proactive alerts, and dynamic dashboards - 256-bit AES encryption, multilingual support, mobile-first UX --- ### **Distribution Network** - **Physical Footprint**: - **372 owned branches** across **12+ states**, serving MSME and rural finance clients - **262 branches under Pragati Finserv** (rural arm) with a team of **2,014 employees**, including **1,738 field staff** - Each Loan Officer manages ~277 clients and INR 73 lakh in loans - **Partnership Network**: - **55 digital partners**, **328 originator partners**, **~1,300 investor partners** - Collaborates with **fintechs, NBFCs, banks, MFIs, and loan aggregators** under the **FLDG (Fair, Learnable, Dignified, and Growth-aligned) model** - **Multi-Channel Reach**: - Serves **over 1.6 million D2C customers** and **4.03 lakh active borrowers via Pragati** - Reaches underserved populations across **Bharat (rural India)** through hybrid physical-digital delivery --- ### **Financial Performance & Resilience** - **FY24–25 Highlights**: - Disbursed over **INR 35,000 crore** in credit - **Profit before provisions (PPOP)**: INR **791 crore** (+45.7% YoY) - Net spreads: **7.9%** (up from 7.5% in FY23–24) - **GNPA**: 0.45%, **NNPA**: 0.08% — significantly below industry average - **ROE**: 14.54%, **ROA**: 2.97% - Achieved **credit upgrade to AA– by India Ratings (April 2024)** - **Funding Strength**: - **Cost of funds**: 9.2% in FY23–24 - Diversified liability franchise with access to banks, bonds, CPs, securitization, and offshore debt - **Capital Raising**: - **IPO in September 2024**: Raised **INR 777 crore**, including **INR 500 crore primary capital** - **INR 382 crore equity infusion from IFC and others (April 2024)** --- ### **Governance & Leadership** - Co-founded by industry veterans including **Mr. P.S. Jayakumar**, co-founder of Home First Finance and Value Budget Housing - Emphasis on **prudent risk management**, **sound governance**, and **long-term resilience** - Navigated multiple credit cycles: **demonetisation, NBFC crisis, and pandemic** - Proactive collections, early-warning systems, and dynamic portfolio monitoring ---