Commercial vehicle financier Shriram Transport Finance Company Ltd has raised Rs 350 crore ($48.3 million) in a debt funding deal structured and executed by non-bank lender Northern Arc Capital.
Northern Arc Capital, formerly known as IFMR Capital, also invested in the deal alongside capital market investors. Cash proceeds will be used to support first-time truck buyers, small road transporters and drivers-turned-truck owners who have been impacted by the pandemic, Northern Arc Capital said in a statement.
“The transaction exemplifies Northern Arc Capital’s ability to create value for partners across sizes and credit ratings. Through customised product solutions, we have been able to evince the interest of new investors to our sectors and partners,” said Bama Balakrishnan, operations chief of Northern Arc Capital.
Chennai-based Northern Arc Capital is a digital debt platform that caters to the under-banked in India.
Northern Arc Capital, Vivriti Capital and 16 other lenders invested Rs 165 crore debt funding in credit and payment startup Slice during the financial year 2020-21.
Earlier this month, payments and financial services startup BharatPe raised Rs 50 crore from Northern Arc Capital.
Northern Arc Capital is backed by private equity investors including Leapfrog, IIFL, Accion, and Affirma Capital.
Over the last year, it has attracted debt financing from global development finance institutions and social impact investors such as US International Development Finance Corporation, Asian Development Bank, Calvert Impact Capital, and FMO.
Shriram Transport Finance is the commercial vehicle-financing arm of Shriram Capital, the lending business of diversified financial services firm Shriram Group.
It had assets under management of Rs 1,11,725 crore as of 31 March 2021.