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.
