Archive · 2 Jun 2025
Northern Arc Plans Expansion and Margin Improvement
Northern Arc Capital wants to lend money directly to more customers and businesses.
This means they want to increase the amount of loans they give out themselves.
They are aiming for significant growth in the next fiscal year.
They plan to reduce microfinance exposure, focusing more on secured loans and direct-to-customer lending.
This strategy should help them make more profit on each loan.
Even though there were some increased costs last year due to one-time factors, they expect costs to be manageable going forward.
They also operate a platform to generate and distribute credit.
Northern Arc Capital targets 22-25% business growth in FY26.
The company aims to increase its direct lending business to over 60% of AUM.
Northern Arc plans to expand its direct-to-customer business and secured loan book.
Credit costs rose in FY25 due to specific factors, but are expected to stabilize.
Net profit for the January-March 2025 quarter decreased by 47.55% QoQ.
- Who
- Northern Arc Capital, led by MD & CEO Ashish Mehrotra.
- What
- Northern Arc Capital plans to expand direct lending and improve net interest margins.
- When
- Northern Arc Capital is targeting 22-25% business growth in FY26, following a 23% rise in transaction volumes and 16% growth in assets under management (AUM) last year.
- Where
- The company operates around 70 branches, with plans for further expansion.
- Why
- The company aims to increase its own lending business to improve margins and drive growth.
- Targeted Business Growth (FY26)
- 22-25%
- AUM Growth (Last Year)
- 16%
- Microfinance Exposure
- < 10% of balance sheet
- Net Interest Margin (NIM) Expansion Target
- 200 bps
- Credit Cost (FY25)
- 300 bps
- Market Capitalisation
- ₹3,459.17 crore