Synopsis: Northern Arc Capital and YES BANK have partnered to expand credit access, enhance digital lending capabilities, and strengthen financial inclusion across underserved segments in India.
This Small-Cap NBFC Stock, engaged in providing credit solutions, direct lending, fund management, debt placements, and technology-driven financial services to individuals and businesses across India, jumped 2.21 percent after signing an MoU with YES BANK for credit and financial services.
With a market capitalization of Rs. 4,830.59 crores, the share of Northern Arc Capital Limited has reached an intraday high of Rs. 301.20 per equity share, rising nearly 2.21 percent from its previous day’s close price of Rs. 294.70. Since then, the stock has retreated and is currently trading at Rs. 298.90 per equity share.
Reason Behind the Surge
Northern Arc Capital Limited (NACL) and YES BANK have entered into a strategic partnership to increase access to credit and financial services across India. Through this collaboration, Northern Arc will use its network of 368 originator partners to help YES BANK expand lending, especially to underserved sectors such as MSMEs, rural borrowers, and emerging businesses. The partnership also aims to strengthen financial inclusion and support India’s long-term economic growth goals.
The agreement includes the integration of Northern Arc’s technology platforms with YES BANK’s digital lending systems to make loan processing faster and more efficient. In addition, YES BANK customers will gain access to investment products, alternative investment funds, and digital bond platforms offered by Northern Arc and its subsidiaries. This partnership is expected to create new business opportunities, improve customer reach, and drive sustainable growth for both organizations.
AUM and Customer Base
Northern Arc Capital has continued to expand its Assets Under Management (AUM), which increased from Rs. 13,634 crore in FY25 to Rs. 16,594 crore in FY26, reflecting a growth of 21.7 percent YoY. Over the last five years, the company has delivered a strong 26 percent CAGR in AUM growth.
The company’s customer base also witnessed significant expansion. The number of direct-to-customer borrowers increased from 1.99 million in FY25 to 2.96 million in FY26, representing a growth of nearly 48.6 percent YoY. This highlights Northern Arc Capital’s increasing reach across underserved customer segments.
Business Operations
Northern Arc Capital operates through three primary verticals, such as Lending, Placements, and Investments. Its Direct-to-Customer (D2C) lending serves MSMEs, consumers, and rural borrowers via 400-plus branches and digital partners.
The Credit Solutions arm provides structured finance and securitization to over 350 originator partners, NBFCs, microfinance institutions, and fintechs. Its Investment Management business runs Alternative Investment Funds (AIFs) and Portfolio Management Services (PMS) through Northern Arc Investment Managers Limited.
Company Overview
Northern Arc Capital Limited was founded in 1989 and is a diversified Indian financial services company registered with the Reserve Bank of India as a non-banking financial company (NBFC). Headquartered in Chennai, it provides debt, lending, and investment solutions that bridge capital access for under-served households, microenterprises, and mid-market businesses across India.
Recent Quarter Results
Coming into financial highlights, Northern Arc Capital Limited’s revenue has increased from Rs. 603 crore in Q4 FY25 to Rs. 742 crore in Q4 FY26, which has grown by 23.05 percent. The net profit has also grown by 250 percent from Rs. 38 crore in Q4 FY25 to Rs. 133 crore in Q4 FY26. Northern Arc Capital Limited’s revenue and net profit have grown at a CAGR of 32 percent and 43 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE stand at 9.71 percent and 11.1 percent, respectively. Northern Arc Capital Limited has an earnings per share (EPS) of Rs. 25.1, and its debt-to-equity ratio is 3.15x.
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