UGRO Capital Share Price Jumps 7% After ₹1,400-Crore Profectus Capital Acquisition

Market Performance

• UGRO Capital's share price surged 7% on June 18, reaching an intraday high of ₹183.35 on the BSE.
• Despite this rally, the stock remains over 37% below its 52-week high of ₹294 hit in July 2024.
• The scrip had previously touched a 52-week low of ₹144.11 in March 2025.
• Over the past 12 months, UGRO Capital shares have declined over 38%.
• Month-wise performance:
  • June 2025: Down 1% so far
  • May 2025: Up 1%
  • April & March 2025: Up over 7% each
  • Oct 2024 to Feb 2025: Losses for five straight months

Main News: UGRO Capital Acquires Profectus Capital in ₹1,400-Cr All-Cash Deal

UGRO Capital has announced the acquisition of Mumbai-based NBFC Profectus Capital in a ₹1,400-crore all-cash deal.

• The deal is expected to close within 2 to 3 months, pending regulatory and shareholder approvals.
• The acquisition will be financed through:
  • ₹400 Crore from UGRO's recent rights issue
  • Internal accruals
  • Potential issuance of compulsorily convertible debentures (CCDs)

UGRO Capital emphasized that the transaction will expand its asset base instantly, adding Profectus' loan portfolio to its existing book.

Company Details: Boost to UGRO's Business Scale

With this acquisition:

• UGRO's Assets Under Management (AUM) is expected to grow by 29%, reaching a total of ₹15,471 Crore.
• Profectus Capital contributes a loan book of ₹3,468 Crore.
• Profectus operates via 28 branches across 7 Indian states and focuses on:
  • School financing
  • Loans against property
  • Supply chain finance

As of March 2025:

• Gross NPA: 1.6%
• Net NPA: 1.1%

Post-acquisition:

• Profectus will become a wholly owned subsidiary of UGRO Capital.
• Both entities are expected to merge effective April 1, 2025.

The acquisition aligns with UGRO's focus on building a secured lending base with strong underwriting capabilities.

Revenue Impact and Profitability Upside

UGRO Capital anticipates significant cost and profit benefits from the deal:

• Cost savings: ₹115 Crore
• Annualized profit increase: ₹150 Crore
• Return on Assets (ROA) to improve by 0.6–0.7%

This acquisition strategy aims to strengthen UGRO's embedded finance and MSME lending segments without incurring extra origination expenses.

Acquisition Structure and Legal Framework

• The transaction is being executed through a share purchase agreement, under which UGRO Capital will acquire full ownership of Profectus Capital.
• Advisors involved:
  • UGRO Capital: InCred Capital (exclusive advisor), SNG & Partners (legal), PwC (financial due diligence)
  • Profectus Capital: Avendus Capital

UGRO also stated that it will seek board and shareholder approval to include the acquisition under the scope of its existing CCD issuance plan.

Summary of the Article

• UGRO Capital's share price gained 7% after announcing a ₹1,400-crore acquisition of Profectus Capital.
• The deal is expected to close in 2–3 months, pending approvals.
• Profectus adds ₹3,468 Crore to UGRO's loan book, boosting total AUM to ₹15,471 Crore.
• UGRO projects ₹115 Crore in savings and ₹150 Crore in profit addition from the acquisition.
• The company's return on assets (ROA) is expected to increase by 0.6–0.7 percentage points following the deal.
• The acquisition strengthens UGRO's presence in secured and high-yield micro, small, and medium-sized enterprise (MSME) lending.