Archive · 8 Nov 2025
UGRO Capital to acquire Profectus Capital, aiming for Rs 17,000 crore AUM
UGRO Capital, a company that lends money, is about to buy another company called Profectus Capital.
This purchase will instantly add a lot of money to UGRO's total managed funds, making it easier for them to reach their big goal of managing Rs 17,000 crore.
They are also growing their business by lending to people and businesses through their many branches and online partners.
UGRO is focusing on becoming more efficient, like making sure their branches help more people and finding ways to borrow money more cheaply.
They are careful about lending in areas where it's been a bit difficult, like small loans.
This purchase means more of UGRO's business will be directly on their books, rather than using special financial arrangements.
The company recently announced that its profits are up and its total managed funds have grown.
UGRO Capital anticipates completing the acquisition of Profectus Capital this month, adding Rs 3,000 crore to its asset base.
The acquisition is expected to help UGRO Capital surpass its AUM target, aiming for Rs 16,500–17,000 crore by the fiscal year's end.
For the quarter ended September 30, UGRO Capital's AUM grew 20% year-on-year to Rs 12,226 crore, and net profit rose 22% year-on-year to Rs 43.3 crore.
Future growth will focus on micro LAP and embedded finance, with UGRO also aiming to reduce its cost of borrowing and improve branch productivity.
The acquisition of Profectus Capital, an on-book NBFC, will temporarily decrease UGRO's off-balance sheet book share from 43% to approximately 35%.
- Who
- UGRO Capital
- What
- Is set to complete the acquisition of Profectus Capital, which will add Rs 3,000 crore to its assets and help surpass its AUM target, while also reporting a 22% YoY net profit increase for the September quarter.
- When
- Acquisition expected to complete within the current month; results for the quarter ended September 30, 2024, have been reported.
- Where
- Operations include a branch network across India and digital partnerships.
- Why
- To increase Assets Under Management (AUM), achieve growth targets, and optimize cost of borrowing, while managing portfolio quality and capital efficiency.
UGRO Capital's Strategy
Market/Industry Conditions
Growth and AUM Targets
UGRO Capital's Strategy
UGRO Capital is pursuing acquisition and organic growth to exceed its AUM target of Rs 15,000 crore, aiming for Rs 16,500-17,000 crore by fiscal year-end.
Market/Industry Conditions
The market, particularly for small ticket micro-LAP and unsecured loans, has been under stress, leading UGRO to slow down approvals and disbursements in these segments despite seeing consistent portfolio quality.
Focus Areas
UGRO Capital's Strategy
The company plans to drive incremental growth through micro LAP via its branch network and embedded finance via digital partnerships.
Market/Industry Conditions
While focusing on growth, UGRO is also prioritizing productivity and cost optimization, aiming to reduce its cost of borrowing and increase branch disbursement efficiency.
Off-Balance Sheet Financing
UGRO Capital's Strategy
UGRO aims to maintain an off-balance sheet book ratio between 30-35% in the long run for risk and capital efficiency.
Market/Industry Conditions
The acquisition of Profectus, a fully on-book NBFC, will temporarily reduce the off-book share to 35% from the current 43%.
- Company
- UGRO Capital
- Acquisition Target
- Profectus Capital
- Reporting Period
- Quarter ended September 30, 2024
- Net Profit (Q2 FY25)
- Rs 43.3 crore (up 22% YoY)
- AUM (as of Sep 30, 2024)
- Rs 12,226 crore (up 20% YoY)
- Projected FY End AUM
- Rs 16,500–17,000 crore
- Acquisition Impact on AUM
- Immediate addition of Rs 3,000 crore
- Off-Balance Sheet Book
- Rs 5,271 crore (43% of AUM), expected to reduce to 35%
