In advance of its anticipated initial public offering (IPO) in the first half of the current fiscal year (H1FY25), Northern Arc Capital Ltd. (NACL) is seeking to raise Rs 385 crore of private equity capital.
The rating agency ICRA states that the PE infusion will help the non-banking financial company (NBFC) funded by LeapFrog Investments and IIFL keep its managed gearing, or financial leverage, below 4.0 times on a steady-state basis.
ICRA reiterated its ‘AA-‘ rating for the long-term fund-based facilities provided by the microfinance company to MSME finance firms.
As of December 2023, the company’s aggregate value increased by 30% year over year (Y-o-Y) to Rs 10,675 crore. As of December 2023, advances to corporate houses and NBFCs accounted for 43.1% of AUM, followed by partner advances to retail clients (24.2%), direct retail loans (12.1%), and debt instrument investments (11.9%).
IIFL Special Opportunities Fund owned the majority stakes in the business as of December 2023, holding 25.6% of NACL. The other prominent institutional investors were Augusta Investments II Pte Ltd with a 19.5% share and Leapfrog Financial Inclusion India II Limited with a 22.5 percent stake.
