Northern Arc Capital Limited has successfully completed its postal ballot process, with shareholders approving two key director appointments through remote e-voting. The company announced the results on January 24, 2026, marking the effective date for both resolutions.

Postal Ballot Overview

The postal ballot process was conducted in accordance with Section 108 of the Companies Act, 2013, and Regulation 44 of the SEBI Listing Regulations. The company had 1,03,725 total shareholders on the record date of December 12, 2025, who were eligible to participate in the voting process.

Resolution Results

Both resolutions presented to shareholders received overwhelming approval through the remote e-voting process conducted by National Securities Depository Limited (NSDL).

Resolution 1: Appointment of Independent Director

The special resolution for appointing Ms. Vidya Krishnan (DIN: 09669166) as an Independent Director achieved strong shareholder support.

Resolution 2: Appointment of Non-executive Director

The ordinary resolution for appointing Ms. Anuradha Rao (DIN: 07597195) as a Non-executive Non-Independent Director also secured substantial shareholder approval.

Scrutinizer's Report

CS N.A Srinivasan, Advocate/Designated Partner of Genicon Legal LLP, Chennai, served as the appointed scrutinizer for the postal ballot process. The scrutinizer confirmed that both resolutions were passed with the requisite majority as per regulatory requirements.

The voting process was conducted entirely through electronic means, with the e-voting facility provided by NSDL. The remote e-voting period commenced on Friday, December 26, 2025, at 09:00 a.m. IST and concluded on Saturday, January 24, 2026, at 05:00 p.m. IST.

Regulatory Compliance

The company fulfilled all regulatory requirements for the postal ballot process, including:

• Dispatch of postal ballot notice via email on December 24, 2025
• Advertisement in Business Standard (English) and Makkal Kural (Tamil) on December 25, 2025
• Compliance with MCA circulars regarding e-voting procedures
• Submission of voting results and scrutinizer's report to stock exchanges

The voting results and scrutinizer's report have been submitted to BSE Limited and National Stock Exchange of India Limited in compliance with regulatory obligations. The company has also uploaded these documents on its website at www.northernarc.com for stakeholder access.

Northern Arc Capital has received an optimistic target price of ₹326 against its current market price of ₹251.90, as analysts highlight the company's strong transformation prospects despite current market skepticism. The financial services company is undergoing a strategic pivot that positions it for substantial growth in the coming years.

Strategic Business Transformation

Northern Arc Capital has been executing a significant strategic shift from wholesale to retail lending since FY22, which has already yielded impressive results. This transition has delivered substantial improvements in key financial metrics:

Strong ROE Growth Trajectory

Analysts project Northern Arc Capital's return on equity may reach 15.7% by FY28E, driven by the continued transition to high-margin direct-to-consumer business. This represents a dramatic improvement from the company's historical performance, with the structural ROE expected to reach 15% compared to approximately 5% in FY21.

The company's long-vintage experience in finance placement and fund management is expected to support fee income growth, strengthening its ability to absorb structurally higher credit costs while maintaining ROE above cost of equity.

Growth Prospects and Expansion Opportunities

The current business model is projected to deliver strong earnings growth, with analysts forecasting a 41% EPS CAGR for FY26-28E. Beyond the immediate growth trajectory, Northern Arc Capital has identified longer-term growth opportunities through:

• Scaling up vehicle finance operations
• Expanding affordable home finance offerings
• Building expertise through intermediate retail routes
• Leveraging D2C growth levers for sustained expansion

Valuation and Market Position

Despite the improving business prospects, Northern Arc Capital trades at a 50-60% valuation discount to its peers, which analysts believe undermines the company's transformation story. The fair value assessment factors in a 20% AUM CAGR and 15% average ROE for FY26-36E, implying valuation multiples of 1.2x FY27E BVPS and 10x FY27E EPS.

Risk Factors and Market Outlook

Analysts have identified key risks that could impact the growth trajectory, including slower asset quality recovery and potential delays in D2C growth execution. Additionally, reducing overleveraging among bottom-of-pyramid customers is expected to aid credit cost improvement during FY26-28E.

The analysis suggests that while the market currently undermines Northern Arc Capital's NIM and ROE improvement prospects due to legacy wholesale mix and recent high credit costs, the company's strategic transformation positions it well for sustained growth and improved profitability in the medium to long term.