UGRO Capital to Acquire Capital in ₹ 1,400 CR All-Cash Deal

UGRO Capital has announced it will acquire 100% stake in Profectus Capital for ₹1,400 crore in an all-cash deal, aiming to strengthen its position in the secured MSME lending segment. The transaction, subject to regulatory and shareholder approvals, is expected to close within the next two to three months.The deal will be funded through a mix of UGRO’s recent capital raise and internal accruals. UGRO said the acquisition will immediately expand its assets under management (AUM) by 29%, while also adding Profectus’ ₹3,468 crore loan book to its portfolio. The combined entity will have a consolidated AUM of approximately ₹15,471 crore.
Profectus Capital operates across seven Indian states through 28 branches and focuses primarily on secured lending products such as school financing, supply chain finance, and loans against property. Its gross non-performing assets (NPAs) stood at 1.6% as of March 2025, with net NPAs at 1.1%.Shachindra Nath, Founder and Managing Director of UGRO Capital, said the deal would help the company scale rapidly while improving profitability and asset quality.“This strategically priced acquisition deploys our equity raise to achieve instant scale and ₹115 crore in cost savings, along with an annualised incremental profitability of ₹150 crore—boosting ROA by 0.6–0.7%,” Nath said. “Integrating Profectus’ school finance expertise unlocks ₹2,000 crore growth potential and strengthens our secured asset mix, accelerating our journey to become India’s largest MSME lender.”Also Read: MSME resilience holds firm as demand and credit trends improve: SIDBI-Jocata report
The company also plans to merge Profectus into UGRO effective April 1, 2025, following the acquisition. Both firms will continue operating independently until the integration process is completed.The move comes as UGRO looks to diversify its lending base and deepen its footprint in high-yield lending areas, particularly in emerging markets and embedded finance. The acquisition also broadens UGRO’s lender relationships, giving it access to Profectus’ network of private and small finance banks.InCred Capital acted as the exclusive advisor on the deal, with SNG & Partners and PwC providing legal and financial due diligence support, respectively.Shares of UGRO Capital ended at ₹169.90, down -1.91 % today on NSE.

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