Mumbai: UGRO capital, a NBFC focused on MSME lending, has received RBI’s approval to acquire Profectus Capital Private Ltd for approximately Rs.1,400 crore. The transaction is expected to close by October 31, 2025 after which the Mumbai-based company will become a subsidiary of UGRO Capital Limited. Once done, the company will eventually be merged into UGRO Capital, giving UGRO Capital access to Profectus’ client mix, and eventually scaling up the business by 30%.
Following the transaction, UGRO capital’s Assets Under Management (AUM) will grow by 29%, helping it diversify into high-yielding emerging markets and expanding its asset mix. UGRO will also get access to incremental opportunities in the Rs.2,000+ crore school financing market, while boosting its Machinery Finance, Supply Chain Finance and Secured LAP businesses. Post-merger, these synergies could add approximately Rs.150 crores to UGRO Capital’s down line, enhancing the Return on Assets by 0.6-0.7%.
“The RBI’s approval is a critical milestone that validates our strategy and accelerates our mission of solving India’s small business credit gap. Profectus’ complementary portfolio, combined with UGRO’s DataTech underwriting capabilities, will enable stronger profitability, higher secured lending, and inclusive growth across the MSME ecosystem.” Mr. Shachindra Nath, Founder and Managing Director, UGRO Capital, said in a press release to the bourses.
UGRO aims to pay for this transaction through a recent issue of 20,000 unsecured, non convertible debentures veiled at about Rs.200 crore, along with the equity it has raised recently as well. Post- acquisition, UGRO will have a combined AUM of Rs.15,000 crore, serving more than 2 lakh MSMEs across India.
