SUMMARY
- Northern Arc launches ₹1,500 Cr Finserv Fund to support financial intermediaries in underserved sectors.
- Finserv Fund aims for 14-14.5% returns, targeting 45-55 businesses in six key segments.
- Northern Arc achieved ₹1,890 Cr revenue in FY24, up 44% with ₹317.69 Cr profit.
With a target corpus of ₹1,500 crore (about $178.5 million), non-banking financial corporation (NBFC) Northern Arc announced the launching of its category-II alternative investment fund (AIF), Finserv Fund. The firm announced in a statement that there will be an extra ₹500 crore (about $59.5 million) green shoe option available for the fund.
Finserv Fund, introduced through its subsidiary Northern Arc Investment Managers (NAIM), would provide long-term lending to financial intermediaries with a primary focus on underserved and unserved segments.
As per Inc42, a Northern Arc representative has told them that the fund will support 45–55 businesses, with each company’s average ticket size being ₹40 crore, the new fund will target financial intermediaries in the following six segments: affordable housing, auto loan, microfinance, consumer finance, farm finance, and micro, small, and medium-sized businesses (MSME).
CEO of Northern Arc Investments, Bhavdeep Bhatt stated, “It will invest in a well-diversified portfolio across 45-55 entities within our key sectors. This fund targets gross returns of 14.00-14.50% XIRR (extended internal rate of return) over its four-year tenure, with a deployment period of approximately six months from the final close. We have successfully closed and exited four funds at higher-than-targeted returns to our investors.”
NBFC Northern Arc was established in 2009 by Asish Mehrotra. It provides a range of services, such as financing, placements, and investments in a variety of industries. Thus far, it has supported several businesses, including Rebel Foods, ProsParity, slice, and BharatPe. The firm also states that it has funded more than ₹1.81 Lakh Cr for its clients in 671 Indian districts since 2009.
In the fiscal year 2023–24 (FY24), Northern Arc recorded revenue of ₹1,890 crore, a 44% increase from the previous fiscal year’s ₹1,304 crore. In contrast to ₹242.21 crore in FY23, it posted a profit of ₹317.69 crore during the fiscal year under review.
