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A Strategic Leap in MSME Lending - UGRO Capital Acquiring Profectus Capital
On June 17, 2025, data tech-driven lender UGRO Capital announced a transformative acquisition. It will acquire a 100% stake in Profectus Capital for ₹1,398.60 Cr in an all-cash deal. This move marks a significant milestone in India’s non-banking financial sector, particularly in MSME lending.
📈 What This Means:
📊 29% AUM growth for UGRO, enhancing scale and lending capacity.
🏫 Entry into School Financing - an untapped ₹2,000 Cr medium-term opportunity.
🏭 Expanded product portfolio with Machinery & Equipment Finance, LAP, and Supply Chain Finance.
💰 Expected cost savings of ₹115 Cr and incremental profitability of ₹150 Cr, potentially boosting ROA by 60–70 bps post-merger.
💼 Strengthens UGRO’s secured lending profile, further de-risking its portfolio.
🧩 Strategic Fit:
With both institutions being RBI-registered NBFCs, the integration is not just a balance sheet addition - it reflects operational synergy, geographic alignment, and a shared mission of empowering underserved MSMEs across India.
🔄 Funded via:
A preferential issue of compulsorily convertible debentures (CCDs), repurposed from business expansion to fund this strategic buyout.
📊 Key Financial Metrics (FY 2025)
✅ Profectus Capital Private Limited
Asset Size (AUM): ₹3,577.66 Crores
Turnover: FY 2025: ₹419.98 Crores
Previous Year Turnovers: FY 2024: ₹402.69 Crores, FY 2023: ₹273.06 Crores
Business Segments: Enterprise Mortgage Loans, School Funding Program, Machinery & Equipment Finance, Supply Chain Finance, NBFC, Onward Lending
✅ UGRO Capital Limited:
AUM: FY 2025: ₹12,003 Crores
Net Profit: FY2025 – ₹144 Crores
Revenue: FY2025: ₹814 Crores
Customer Base: >150,000 Customers
Employee Strength: >2000
Branches: >235
🔍 Takeaway: This acquisition isn’t just about size - it’s about sharpening focus. UGRO is betting on specialization, scalability, and sectoral diversification to lead the next wave of NBFC innovation.
Earlier, UGRO Capital acquired embedded finance platform MyShubhLife (MSL) and as of March 2025, it achieved an AUM of ₹743 crores.
It’s time to see how this acquisition plays out for Ugro Cap. Until then…
💬 What are your thoughts on consolidation in the NBFC sector? Is this the beginning of a trend?
#UGROCapital #ProfectusCapital #NBFC #MSMELending #FinanceNews #CreditMarket #BankingAndFinance #MergersAndAcquisitions #FintechIndia #FinancialInclusion
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