Ugro Capital, an NBFC serving small and medium businesses, raised Rs 1,322 crore in new capital from a blend of new and existing investors and family offices via compulsory convertible debentures and warrants.
Samena Capital led the Rs 500 crore round, with participation from hedge fund Aregence and family offices, as disclosed in Thursday’s stock exchange filing. Ugro’s founder, board members, and management collectively contributed Rs 16.25 crore. InCred Capital served as the investment banker for the deal.
Following MSL’s integration as a Ugro Capital subsidiary, the company plans to onboard 200,000 new retailers over the next three years, aiming for incremental assets under management of Rs 1,500 crore and a projected profit after tax of Rs 100 crore within the same period.
Due to RBI licensing regulations prohibiting multiple NBFC licenses within a single group entity, MSL will surrender its permit.
Shachindra Nath, founder and managing director of Ugro Capital, discussed the challenges of short-term credit in the open market and emphasized the strategic move towards embedded financing to target specific market segments effectively.
“In next two years, Ugro Capital will be the largest MSME financing company in the country and it is now entering embedded financing through this unique acquisition, that has the potential to do a disbursement of almost Rs 8,000 to 10,000 crore,” Nath added.