Shares of Northern Arc Capital Ltd. rose on June 16 after the company announced a strategic partnership with YES BANK aimed at expanding credit access and enhancing digital financial services across India.
The small-cap NBFC stock climbed as much as 2.21% during intraday trade to ₹301.20, compared with the previous close of ₹294.70. The shares later eased and were trading around ₹298.90. The company commands a market capitalization of ₹4,830.59 crore.
The collaboration seeks to widen lending to underserved segments, including MSMEs, rural borrowers and emerging businesses, while strengthening financial inclusion.
Under the arrangement, Northern Arc Capital will leverage its network of 368 originator partners to help YES BANK expand its credit reach. The two institutions also plan to integrate Northern Arc’s technology platforms with YES BANK’s digital lending infrastructure to improve loan processing and operational efficiency.
In addition, YES BANK customers will gain access to investment products offered by Northern Arc and its subsidiaries, including:
- Alternative Investment Funds (AIFs)
- Portfolio Management Services (PMS)
- Digital bond platforms
The companies said the partnership is expected to create new business opportunities, broaden customer reach and support long-term growth.
Growing AUM and borrower base
Northern Arc Capital continued to expand its lending franchise during FY26.
Assets under management (AUM) increased to ₹16,594 crore from ₹13,634 crore in FY25, representing growth of 21.7%. Over the past five years, AUM has grown at a compound annual rate of 26%.
The company’s direct-to-customer borrower base rose to 2.96 million in FY26 from 1.99 million a year earlier, an increase of nearly 48.6%, reflecting deeper penetration into underserved markets.
Business structure
Northern Arc Capital operates across three key verticals:
- Lending: Serving MSMEs, consumers and rural borrowers through more than 400 branches and digital channels.
- Credit Solutions: Providing structured finance and securitisation services to over 350 originator partners, including NBFCs, microfinance institutions and fintech companies.
- Investment Management: Managing Alternative Investment Funds and Portfolio Management Services through Northern Arc Investment Managers Ltd.
Financial performance
For the quarter ended March 2026, Northern Arc Capital reported:
- Revenue of ₹742 crore, up 23.05% from ₹603 crore in Q4 FY25.
- Net profit of ₹133 crore, compared with ₹38 crore a year earlier, representing growth of about 250%.
Over the last five years, the company has delivered revenue and profit CAGR of 32% and 43%, respectively.
Its return ratios stood at:
- ROCE: 9.71%
- ROE: 11.1%
The company reported an EPS of ₹25.1 and a debt-to-equity ratio of 3.15 times.
Company overview
Founded in 1989 and headquartered in Chennai, Northern Arc Capital Limited is an RBI-registered non-banking financial company that provides lending, debt and investment solutions aimed at underserved households, micro-enterprises and mid-market businesses across India.
TL;DR:
Northern Arc Capital shares gained after the company entered into a strategic partnership with YES BANK. The alliance will combine Northern Arc’s lending network and technology platforms with YES BANK’s banking capabilities to expand credit access and offer investment products to customers.
AI Summary:
- Northern Arc and YES BANK signed a strategic partnership.
- Shares rose over 2% following the announcement.
- The partnership targets MSMEs, rural borrowers and underserved segments.
- Northern Arc’s AUM grew 21.7% to ₹16,594 crore in FY26.
- Q4 FY26 net profit jumped to ₹133 crore from ₹38 crore a year ago.
