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United News of India
5 days ago
- Business
- United News of India
UGRO Capital to acquire Profectus capital in Rs 1,409 crore cash deal
Hyderabad, June 18 (UNI) UGRO Capital Limited, a leading DataTech NBFC focused on MSME lending, on Wednesday announced it has executed a Share Purchase Agreement with the existing shareholders of Profectus Capital Private Limited ("Profectus") to acquire 100% of the shares of Profectus. This all-cash deal, with the consideration payable in a single tranche at closing, shall mobilise proceeds from UGRO's recently announced equity raise and will deploy capital into a fully secured asset portfolio delivering instant scale benefits with zero origination costs, making Profectus a wholly owned subsidiary, the company said in a release. We estimate that this acquisition would add around Rs 150 crores of annualised profit to UGRO making it a capital adequacy accretive transaction. The acquisition strategically enhances four core NBFC pillars: Immediate 29% AUM growth diversifies the combined portfolio to accelerate high-yield Emerging Markets and Embedded Finance expansion, while adding School Financing with incremental Rs 2,000 crore medium-term potential, as per our assessment. We estimate significant geographic and product alignment in Secured LAP, Machinery Finance, and Supply Chain Finance, which we believe will drive operational efficiencies, generating Rs 115 crore in cost savings and adding incremental profitability of ₹150 crore, thus boosting ROA by 0.6-0.7% once a post-acquisition merger is complete. The combined entity's strengthened asset mix features higher secured assets, thereby providing further impetus to scale emerging market and embedded finance businesses. Profectus has demonstrated stable portfolio expansion, building its assets under management to Rs 3,468 crore as of March 2025, with a presence across seven states through a 28-branch network and an over 800-member team, all while maintaining a gross NPA of 1.6% and a net NPA of 1.1%. Its complementary businesses in secured lending perfectly align with UGRO's data-driven underwriting platform. To facilitate the discharge of purchase consideration for the proposed acquisition, the company is proposing to add financing of Profectus' acquisition as an object of the existing preferential issuance of compulsorily convertible debentures by seeking fresh approval from the board and shareholders. The acquisition is expected to close on fulfilment of customary conditions, including receipt of RBI/shareholder approvals. Both entities will maintain current operations and strategy during integration. Reflecting on this acquisition, Shachindra Nath, Founder and Managing Director of UGRO Capital, said, 'This strategically priced acquisition deploys our equity raise to achieve instant scale and Rs 115 crore cost savings and annualised incremental profitability of Rs 150 crores, thus boosting ROA by 0.6–0.7%. Integrating Profectus' school finance expertise unlocks Rs 2,000 crores in growth potential and strengthens our secured asset mix – accelerating our journey to become India's largest MSME lender through enhanced Emerging Markets and Embedded Finance capabilities.' Mr. K.V. Srinivasan, Executive Director & CEO, Profectus Capital, added, 'The coming together of the two organisations would be beneficial owing to the synergies and complementarity of the businesses, which should result in greater operational efficiency and profitability for the business. We at Profectus, thank our investors for their unwavering commitment and support throughout our journey, which has helped us to establish a very strong process-orientated business with excellent portfolio quality.' With this strategic acquisition, UGRO Capital reaffirms its commitment to driving inclusive economic growth and empowering MSMEs across India, leveraging combined synergies to expand high-yield offerings while maintaining portfolio quality. UNI KNR ARN
Mint
5 days ago
- Business
- Mint
UGRO Capital shares jump 7% on ₹1,400-crore all-cash acquisition of Profectus Capital
Shares of UGRO Capital surged over 7 percent in intraday trade on Wednesday, June 18, following the company's announcement of acquiring Mumbai-based NBFC Profectus Capital Private Limited in an all-cash deal worth ₹ 1,400 crore. The acquisition, subject to shareholder and regulatory approvals, is expected to be completed in the next two to three months. The deal will be financed through a combination of UGRO's recently concluded ₹ 400-crore rights issue and internal accruals. UGRO may also issue compulsorily convertible debentures to fund the balance. The company said the strategic acquisition will immediately expand its assets under management (AUM) by 29 percent, increasing the total consolidated AUM to approximately ₹ 15,471 crore. Profectus brings a ₹ 3,468 crore loan book to UGRO's portfolio. UGRO Capital announced that it will utilise the funds raised through its recent equity issuance to finance the acquisition of Profectus Capital. According to the company's statement, the capital will be directed toward building a fully secured asset base that offers immediate scale advantages without incurring origination costs. UGRO further stated that Profectus' secured lending operations are a strategic fit, aligning seamlessly with UGRO's data-centric underwriting model. 'To facilitate the discharge of purchase consideration for the proposed acquisition, the company is proposing to add financing of Profectus' acquisition as an object of the existing preferential issuance of compulsorily convertible debentures by seeking fresh approval from the board and shareholders,' UGRO said adding the deal is also subject to the approval of the Reserve Bank of India (RBI) and shareholders. According to UGRO Founder and MD Shachindra Nath, 'This strategically priced acquisition deploys our equity raise to achieve instant scale, ₹ 115 crore in cost savings, and an annualised incremental profit of ₹ 150 crore—boosting our RoA by 0.6 to 0.7 percent.' The move is aimed at diversifying UGRO's lending base and deepening its footprint in high-yield areas like embedded finance and MSME lending. Profectus Capital primarily focuses on secured lending products such as school financing, loans against property, and supply chain finance. Operating through 28 branches across seven Indian states, the NBFC had gross NPAs of 1.6 percent and net NPAs of 1.1 percent as of March 2025. Once the acquisition is complete, Profectus will become a wholly owned subsidiary of UGRO Capital. The two companies are expected to merge effective April 1, 2025. UGRO's management expects the combined entity to gain from enhanced lender relationships, with access to Profectus' network of private and small finance banks. The acquisition is structured through a share purchase agreement, with UGRO acquiring 100 percent of Profectus Capital's shares from existing shareholders. InCred Capital served as the exclusive advisor to UGRO Capital, with legal and financial due diligence support provided by SNG & Partners and PwC, respectively. Avendus Capital advised Profectus Capital and its shareholders. Investors welcomed the acquisition news, sending UGRO Capital shares up 7 percent to an intraday high of ₹ 183.35 on the BSE. Despite the uptick, the stock still trades more than 37 percent below its 52-week high of ₹ 294, last touched in July 2024. The scrip had hit its 52-week low of ₹ 144.11 in March 2025. UGRO Capital has had a volatile performance over the past year. The stock has declined over 38 percent in the last 12 months. In June so far, it has slipped around 1 percent after gaining 1 percent in May and over 7 percent each in April and March. Prior to this rally, the stock had posted losses for five consecutive months between October 2024 and February 2025.
Entrepreneur
5 days ago
- Business
- Entrepreneur
UGRO Capital to Acquire Profectus Capital for INR 1,400 Cr in Strategic All-Cash Deal
The acquisition will be funded through UGRO's recently completed equity raise and is expected to be completed in a single tranche upon regulatory approvals, including those from the Reserve Bank of India and shareholders. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Non-banking financial company (NBFC) UGRO Capital has announced that it will acquire Profectus Capital Private Limited in an all-cash deal worth INR 1,400 crore. The transaction, structured as a 100% equity buyout, will make Profectus a wholly owned subsidiary of UGRO Capital, furthering its mission to bridge the credit gap for MSMEs in India. The acquisition will be funded through UGRO's recently completed equity raise and is expected to be completed in a single tranche upon regulatory approvals, including those from the Reserve Bank of India and shareholders. "This strategically priced acquisition deploys our equity raise to achieve instant scale, INR 115 crore in cost savings, and INR 150 crore in annualized incremental profitability, boosting ROA by 0.6–0.7%," said Shachindra Nath, Founder and Managing Director of UGRO Capital. "Integrating Profectus' school finance expertise unlocks INR 2,000 crore growth potential and strengthens our secured asset mix – accelerating our journey to become India's largest MSME lender." Profectus Capital currently manages assets worth INR 3,468 crore, has a 28-branch network across seven states, and employs more than 800 people. With gross and net NPAs at 1.6% and 1.1% respectively, the company claims to have built a stable, secured lending portfolio aligned with UGRO's data-driven underwriting platform. The acquisition will immediately boost UGRO's Assets Under Management (AUM) by 29% and enhance its offerings across School Financing, Machinery Finance, Supply Chain Finance, and Secured LAP segments. UGRO expects operational efficiencies and expanded geographic reach, estimating total synergy benefits to significantly enhance capital adequacy and return on assets. "This merger brings together two like-minded platforms focused on quality and innovation," said K V Srinivasan, CEO of Profectus Capital. "We thank our investors for their continued support and look forward to scaling new heights with UGRO." Both companies will maintain their current operations during the integration period. UGRO has sought board and shareholder approval to include Profectus' acquisition in its existing issuance of compulsorily convertible debentures. Advisors to the transaction include InCred Capital (financial), SNG & Partners (legal), PwC Services LLP (financial due diligence), and Legacy Growth Partners (tax due diligence). Listed on NSE and BSE, UGRO Capital leverages its DataTech lending platform and partnerships with 17 banks and NBFCs to drive innovative financing solutions for India's underserved MSME sector.
Mint
5 days ago
- Business
- Mint
UGRO Capital shares jump 7% on ₹1,400-crore all-cash acquisition of Profectus Capital
Shares of UGRO Capital surged over 7 percent in intraday trade on Wednesday, June 18, following the company's announcement of acquiring Mumbai-based NBFC Profectus Capital Private Limited in an all-cash deal worth ₹ 1,400 crore. The acquisition, subject to shareholder and regulatory approvals, is expected to be completed in the next two to three months. The deal will be financed through a combination of UGRO's recently concluded ₹ 400-crore rights issue and internal accruals. UGRO may also issue compulsorily convertible debentures to fund the balance. The company said the strategic acquisition will immediately expand its assets under management (AUM) by 29 percent, increasing the total consolidated AUM to approximately ₹ 15,471 crore. Profectus brings a ₹ 3,468 crore loan book to UGRO's portfolio. UGRO Capital announced that it will utilise the funds raised through its recent equity issuance to finance the acquisition of Profectus Capital. According to the company's statement, the capital will be directed toward building a fully secured asset base that offers immediate scale advantages without incurring origination costs. UGRO further stated that Profectus' secured lending operations are a strategic fit, aligning seamlessly with UGRO's data-centric underwriting model. 'To facilitate the discharge of purchase consideration for the proposed acquisition, the company is proposing to add financing of Profectus' acquisition as an object of the existing preferential issuance of compulsorily convertible debentures by seeking fresh approval from the board and shareholders,' UGRO said adding the deal is also subject to the approval of the Reserve Bank of India (RBI) and shareholders. According to UGRO Founder and MD Shachindra Nath, 'This strategically priced acquisition deploys our equity raise to achieve instant scale, ₹ 115 crore in cost savings, and an annualised incremental profit of ₹ 150 crore—boosting our RoA by 0.6 to 0.7 percent.' The move is aimed at diversifying UGRO's lending base and deepening its footprint in high-yield areas like embedded finance and MSME lending. Profectus Capital primarily focuses on secured lending products such as school financing, loans against property, and supply chain finance. Operating through 28 branches across seven Indian states, the NBFC had gross NPAs of 1.6 percent and net NPAs of 1.1 percent as of March 2025. Once the acquisition is complete, Profectus will become a wholly owned subsidiary of UGRO Capital. The two companies are expected to merge effective April 1, 2025. UGRO's management expects the combined entity to gain from enhanced lender relationships, with access to Profectus' network of private and small finance banks. The acquisition is structured through a share purchase agreement, with UGRO acquiring 100 percent of Profectus Capital's shares from existing shareholders. InCred Capital served as the exclusive advisor to UGRO Capital, with legal and financial due diligence support provided by SNG & Partners and PwC, respectively. Avendus Capital advised Profectus Capital and its shareholders. Investors welcomed the acquisition news, sending UGRO Capital shares up 7 percent to an intraday high of ₹ 183.35 on the BSE. Despite the uptick, the stock still trades more than 37 percent below its 52-week high of ₹ 294, last touched in July 2024. The scrip had hit its 52-week low of ₹ 144.11 in March 2025. UGRO Capital has had a volatile performance over the past year. The stock has declined over 38 percent in the last 12 months. In June so far, it has slipped around 1 percent after gaining 1 percent in May and over 7 percent each in April and March. Prior to this rally, the stock had posted losses for five consecutive months between October 2024 and February 2025. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
5 days ago
- Business
- Time of India
Lender UGRO to buy Profectus in ₹1.4k cr deal
Lender UGRO to buy Profectus in ₹1.4k cr deal MUMBAI: UGRO Capital, a tech-driven non-bank lender focused on MSMEs, will acquire Profectus Capital in a Rs 1,400 crore all-cash transaction. The acquisition, funded through UGRO's recent equity raise, is subject to regulatory approvals and will result in Profectus becoming a wholly owned subsidiary. UGRO Capital was founded in 2017 by Shachindra Nath, a financial services professional with over 26 years of experience. The company uses data analytics and technology to serve small businesses and operates through more than 240 branches. It has built co-lending partnerships with 17 banks and NBFCs, positioning itself as a key player in MSME financing. Profectus Capital, also established in 2017 by K V Srinivasan, specialises in secured lending to small businesses, particularly in the education sector. TNN Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
