UGRO Capital Buys Profectus in Rs 14 Billion All-Cash Deal
ECONOMY & POLICY

UGRO Capital Buys Profectus in Rs 14 Billion All-Cash Deal

UGRO Capital has announced the acquisition of Profectus Capital Private Ltd in an all-cash deal worth Rs 14 billion. The mid-sized non-banking finance company (NBFC) finalised the purchase through a share agreement with Actis PC Investment and Actis PC (Mauritius), both global private equity investors.

Profectus Capital, with assets under management totalling Rs 34.68 billion, operates across seven states with a network of 28 branches and a workforce exceeding 800. The acquisition is expected to be value accretive from Day 1 of consolidation and marks a strategic move for UGRO Capital to expand into high-yield emerging sectors, including embedded finance and school financing—a new vertical for the company.

The deal, executed at 1.07 times Profectus' projected FY26 net worth, is being funded through UGRO’s recent equity raise and internal accruals. Upon completion, Profectus will become a wholly owned subsidiary of UGRO Capital. The transaction is subject to necessary approvals from the Reserve Bank of India and shareholders, and is anticipated to close within two to three months. Both firms will continue to operate independently until integration is complete.

UGRO Capital is expected to benefit from incremental loan growth potential of Rs 20 billion, significant operational synergies, and access to fully secured lending without additional origination costs. The consolidation is projected to deliver annualised operational efficiencies worth Rs 1.15 billion and enhance net profit by Rs 1.5 billion.

This improved efficiency is likely to lift UGRO’s return on assets (RoA) by 0.6–0.7 percentage points, with forecasts suggesting a RoA of 3.5 per cent by FY26 and 4.5 per cent in FY27.

UGRO already collaborates with 17 banks and NBFCs through co-lending arrangements and maintains an off-balance-sheet book accounting for 42 per cent of its total assets under management. Since 2018, UGRO Capital has raised over Rs 25 billion in equity and aims to capture one per cent of India’s MSME market share in the near future.

To facilitate this acquisition, the company will seek board and shareholder approval to include the purchase under the objectives of its existing preferential issue of compulsorily convertible debentures (CCDs).

UGRO Capital has announced the acquisition of Profectus Capital Private Ltd in an all-cash deal worth Rs 14 billion. The mid-sized non-banking finance company (NBFC) finalised the purchase through a share agreement with Actis PC Investment and Actis PC (Mauritius), both global private equity investors.Profectus Capital, with assets under management totalling Rs 34.68 billion, operates across seven states with a network of 28 branches and a workforce exceeding 800. The acquisition is expected to be value accretive from Day 1 of consolidation and marks a strategic move for UGRO Capital to expand into high-yield emerging sectors, including embedded finance and school financing—a new vertical for the company.The deal, executed at 1.07 times Profectus' projected FY26 net worth, is being funded through UGRO’s recent equity raise and internal accruals. Upon completion, Profectus will become a wholly owned subsidiary of UGRO Capital. The transaction is subject to necessary approvals from the Reserve Bank of India and shareholders, and is anticipated to close within two to three months. Both firms will continue to operate independently until integration is complete.UGRO Capital is expected to benefit from incremental loan growth potential of Rs 20 billion, significant operational synergies, and access to fully secured lending without additional origination costs. The consolidation is projected to deliver annualised operational efficiencies worth Rs 1.15 billion and enhance net profit by Rs 1.5 billion.This improved efficiency is likely to lift UGRO’s return on assets (RoA) by 0.6–0.7 percentage points, with forecasts suggesting a RoA of 3.5 per cent by FY26 and 4.5 per cent in FY27.UGRO already collaborates with 17 banks and NBFCs through co-lending arrangements and maintains an off-balance-sheet book accounting for 42 per cent of its total assets under management. Since 2018, UGRO Capital has raised over Rs 25 billion in equity and aims to capture one per cent of India’s MSME market share in the near future.To facilitate this acquisition, the company will seek board and shareholder approval to include the purchase under the objectives of its existing preferential issue of compulsorily convertible debentures (CCDs).

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