UGRO Capital, a datatech NBFC focused on MSME lending, has executed a Share Purchase Agreement with the existing shareholders of Profectus Capital to acquire 100% of the shares of Profectus in a ₹1,400 crore all-cash deal.
This all-cash deal, with the consideration payable in a single tranche at closing shall mobilize proceeds from UGRO’s recently announced equity raise, will deploy capital into a fully secured asset portfolio delivering instant scale benefits with zero origination costs, making Profectus a wholly owned subsidiary.
UGRO Capital estimates that this acquisition would add approximately ₹ 150 crores of annualized profit to UGRO making it a capital adequacy accretive transaction.
The acquisition strategically enhances four core NBFC pillars: Immediate 29% AUM growth diversifies the combined portfolio to accelerate high-yield Emerging Markets and Embedded Finance expansion while adding School Financing with incremental ₹2,000 crores medium-term potential, as per our assessment.
UGRO Capital also estimates significant geographic and product alignment in Secured LAP, Machinery Finance, and Supply Chain Finance which believed will drive operational efficiencies, generating ₹115 crore cost savings and adding incremental profitability of ₹150 crores thus boosting ROA by 0.6-0.7% once a post-acquisition merger is complete.
The combined entity’s strengthened asset mix features higher secured assets, thereby providing further impetus to scale Emerging Market and Embedded Finance businesses.
Profectus has demonstrated stable portfolio expansion, building its assets under management to ₹3,468 Crores as of March 2025, with presence across seven states through a 28-branch network and over 800-member team, all while maintaining a gross NPA of 1.6% and Net NPA of 1.1%. Its complementary businesses in secured lending perfectly align with UGRO’s data-driven underwriting platform.
To facilitate the discharge of purchase consideration for the proposed acquisition, the Company is proposing to add financing of Profectus’ acquisition as an object of the existing preferential issuance of compulsorily convertible debentures by seeking fresh approval from the board and shareholders. The acquisition is expected to close on fulfilment of customary conditions, including receipt of RBI/shareholder approvals.
Shachindra Nath, Founder and Managing Director of UGRO Capital, said, “This strategically priced acquisition deploys our equity raise to achieve instant scale and ₹115 Crores cost savings and annualized incremental profitability of ₹ 150 Crores thus boosting ROA by 0.6–0.7%. Integrating Profectus’ school finance expertise unlocks ₹2,000 Crores growth potential and strengthens our secured asset mix – accelerating our journey to become India’s largest MSME lender through enhanced Emerging Markets and Embedded Finance capabilities.”
