UGRO Capital, a prominent non-banking financial company (NBFC) specializing in MSME lending, announced on May 20, 2025, that its board has approved raising up to ₹915 crore through a preferential issue of compulsorily convertible debentures (CCDs). This strategic move aims to bolster the company’s capital adequacy ratio and support its growth trajectory.
Key Highlights:
- Capital Adequacy Improvement: Post the capital infusion, UGRO Capital’s capital adequacy ratio is expected to enhance from 19.41% at the end of FY25 to 29.4%, providing substantial headroom for future growth.
- Rights Issue: In addition to the CCDs, the board has also approved a rights issue of up to ₹400 crore.
- Conversion Price: The new CCDs will be issued at a conversion price of ₹185 per share.
Previous Capital Raise:
In June 2024, UGRO Capital had successfully raised capital commitments totaling ₹1,265 crore, comprising ₹258 crore through CCDs and ₹1,007 crore via warrants. These instruments were issued at a conversion price of ₹264 per share.
Financial Performance:
As of FY25, UGRO Capital reported assets under management (AUM) of ₹12,003 crore, up from ₹9,047 crore in FY24. The company’s gross non-performing assets (GNPA) ratio stood at 2.3%, compared to 2% in the previous year.
Investor Participation:
The capital raise has garnered significant interest from institutional investors. Samena Capital and its private equity funds, currently holding a 7.49% stake, have committed up to ₹500 crore, positioning themselves as major institutional shareholders. Additionally, the Investment Fund for Developing Countries (IFU), a Danish impact investor, owns a 16.35% stake in UGRO Capital.
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