UGRO Capital (UGRO) will prioritise reducing its cost of borrowing in fiscal year 2027 to narrow a gap with peers of between one and one point two five per cent, founder and managing director Sachindra Nath told PTI. He said the company’s borrowing costs were at least one point two five per cent higher than rivals and that reducing the gap was necessary to serve end customers. The firm will make lowering liability costs a strategic priority after rapid recent growth. UGRO Capital expanded assets under management from about Rs 30 bn in 2020 to nearly Rs 150 bn in 2025, a rise that required greater liability mobilisation and increased borrowing costs. With the base now large and growth expected to moderate, management expects lower demand for liabilities and greater flexibility to negotiate funding rates. The liability mix will remain broadly unchanged, with around 40 per cent from banks, about 20 per cent from global development financial institutions and the balance from capital markets. Nath said the firm will focus on repricing existing liabilities and improving terms rather than altering the overall mix, and that improved credit ratings and a more stable balance sheet should support efforts to narrow the one to one point two five per cent gap with peers. He added that the pace of reduction would depend on market conditions. The company has ruled out any equity capital raise over the next three years, saying it is adequately capitalised. Nath described liquidity on the debt side as fairly strong, supported by relationships with banks, global DFIs and capital market investors, and said the acquisition of Profectus Capital last year had strengthened the secured asset base and operational efficiency. The deal added around Rs 30 bn of secured assets to the balance sheet. Management reported approximately Rs one point two bn of cost savings already realised, with total realignment benefits of about Rs two point two bn expected to enhance cash profitability significantly in fiscal year 2027.