UGRO Capital Secures ₹1,332 Crore Capital For Accelerated MSME Lending Growth

UGRO Capital Limited, a leading DataTech-powered NBFC focused on empowering MSMEs (Micro, Small and Medium Enterprises), announced a significant development on May 2nd, 2024. The company’s Board of Directors approved a strategic capital raise of ₹1,332.66 crore through a combination of Compulsory Convertible Debentures (CCDs) and Warrants.

Fueling Growth Ambitions

This innovative capital-raising strategy ensures that UGRO Capital has the resources necessary to fuel its growth trajectory for both the current and upcoming financial years. The secured funds will provide a strong foundation for the company’s ambitious expansion plans.

Investors Confidence

The capital raise garnered strong commitments from a diverse group of investors, reflecting UGRO’s robust financial standing and future potential:

• Existing Partner Strengthens Commitment: Samena Capital, a long-standing private equity investor in UGRO, pledged a substantial ₹500 crore through Warrants, demonstrating their continued confidence in the company’s vision.
• Expanded Investor Base: Beyond Samena Capital, the offering attracted participation from institutional investors like Aregence and prominent Indian family offices who invested via CCDs and Warrants.
• Management Team Leads by Example: UGRO’s founder, board members, and management team displayed their commitment by collectively investing ₹16.25 crore in Warrants. Notably, the founder reinvested his entire first bonus received from the company into UGRO shares, underscoring his unwavering belief in the company’s future.

Building on a Strong Foundation

This capital raise marks UGRO Capital’s 3rd successful funding round. In 2018, the company embarked on a transformative journey by acquiring ‘Chokhani Securities Limited,’ a listed NBFC. This strategic move coincided with a significant capital raise of ₹914 crore from renowned investors like TPG NewQuest, PAG, ADV Capital, Samena Capital, and a consortium of domestic family offices and public market participants. This funding round stood as one of the largest ever for a listed company at a startup stage in India.

Continued Momentum

UGRO Capital maintained its impressive growth trajectory in 2023 with another strategic capital raise of ₹340.5 crore. This included ₹240 crore secured through a preferential allotment to IFU’s Danish Sustainable Development Goals Investment Fund K/S, demonstrating UGRO’s commitment to sustainable development practices. Additionally, the company garnered ₹100.5 crore from long-term shareholders, including insurance companies, Alternative Investment Funds (AIFs), and other financial institutions, through a Qualified Institutions Placement (QIP).

“The capital raise marks a significant milestone in our journey. We have always wanted to create an Institutionally Owned, Independently Supervised and Professionally Managed FinTech in the listed world so that the opportunity is available to the large universe of Public Market Investors. We believe that we are at a pivotal moment where our potential to be a financial institution is serving the needs of small businesses in India. said Mr Shachindra Nath, Founder and Managing Director of UGRO Capital

He further added, “Today, India needs more financial institutions like ours, to fulfil the credit gap of more than 90 Lac crores and I am thankful to all the investors, lenders, co-lending partners and more importantly all UGROites for making this dream come true.”

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.