Northern Arc Capital raises Rs 910 crore from IILF-led funds

Debt capital platform for financial institutions Northern Arc Capital has raised Rs 910 crore from IIFL Special Opportunities Fund and Affirma Capital for on-lending to financial institutions servicing consumer and fintech sectors. The company has raised the money from IIFL Special Opportunities Fund, which is managed by IIFL Asset Management; Standard Chartered Private Equity and Affirma Capital, a newly-formed independent private equity firm to be managed by the StanC fund team.

"This fresh round of investment will help us address debt needs of our growing client-base across sectors, including new-age financial institutions in sectors such as consumer finance and fintech. It will enable us to increase exposure to existing sectors, deepen client relationships and bolster product innovation," Northern Arc said Tuesday. With this round of funding, the total equity raised by Northern Arc stands at Rs 1,400 crore, it added.

Till date, it has enabled debt financing of around Rs 70,000 crore for its clients across micro and small business finance, affordable housing, auto, agriculture and corporate finance," it said. "The capital will allow us to significantly scale-up the exiting business and pursue new opportunities. We will continue to invest in product development and technology, building on our knowledge, geographical reach, field insights, data analytics and risk-modelling," Northern Arc Capital managing director and chief executive Kshama Fernandes said.

As part of this transaction, early investors Dvara Trust, LeapFrog Investments and Accion will pare their stakes in the company, but will continue to stay invested. Following this investment, Amit Mehta, principal at IIFL Private Equity will join the board of Northern Arc, it said without quantifying the stake dilution. Axis Capital, Credit Suisse and ICICI Securities acted as advisors to the transaction.

(With inputs from agencies.)