Mumbai: Northern Arc Investments has launched IFMR FImpact Income Builder Fund, its sixth debt fund, targeting a corpus of Rs150 crore ($23 million) with a green shoe option of Rs100 crore.

Northern Arc Investments is a unit of Northern Arc Capital, earlier known as IFMR Capital.

The fund will predominantly target domestic institutional investors, high net worth individuals (HNIs) and leading companies. It has already achieved a first close of Rs110 crore.

Northern Arc aims to invest in sectors like microfinance, small business loan finance, affordable housing, commercial vehicle finance, agri-business and corporate finance.

The debt fund has tenure of 3.5 years and aims to make eight to 10 investments of Rs20 crore in early to mid stage companies.

So far, it has invested in companies such as LEAP India, Satya Microcap, Fusion Microfinance and Chaitanya India Fin Credit. The final close of the fund is expected by the first half of 2019.

“The IFMR FImpact Income Builder Fund is our first in a series of short-term credit funds targeting to deliver higher risk-adjusted returns to investors. These funds will address market gaps in funding and provide differentiated debt solutions to high-quality companies," said Ravi Vukkadala, chief executive of Northern Arc Investments.

Till date, the investor has secured commitments of over Rs1,000 crore across all its funds, the company said.

“With the launch of the sixth fund, Northern Arc Investments’ assets under management has crossed Rs1,000 crore and going forward, we hope to break newer grounds for investment in India’s financial inclusion sector," said Kshama Fernandes, chief executive of Northern Arc Capital.

“In this fund, we are targeting all the sectors where Northern Arc works in. Out of Rs110 crore which we managed to raise so far, we have already deployed Rs105 crore. We recently invested in a non-banking financial company, Ess Kay Fincorp Ltd."

IFMR Capital rebranded itself as Northern Arc Capital in February this year. Established in 2008, the company connects non-banking financial companies working among financially excluded households and businesses with investors in existing and emerging debt capital markets.

Northern Arc Capital is also in the process of setting up its first overseas joint venture. The venture will provide the company with the opportunity to extend its business in new overseas markets, Mint reported in February.

Backed by private equity firms Eight Roads Capital and Standard Chartered Private Equity (SCPE), the company is looking to raise funds through a private round, ahead of its plans to go public and was in talks to appoint investment banks for an IPO, Mint reported.

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