UGRO Capital Limited: Comprehensive Company Profile

Background

Overview

UGRO Capital Limited, established in 2018 by Mr. Shachindra Nath, is a DataTech Non-Banking Financial Company (NBFC) dedicated to bridging the credit gap for Micro, Small, and Medium Enterprises (MSMEs) in India. By leveraging advanced data analytics and an extensive distribution network, UGRO Capital delivers tailored credit solutions to MSMEs across the country. The company operates under the belief that "MSME Accha Hai," emphasizing the vital role of MSMEs in the Indian economy.

Mission and Vision

Mission: "Solve the Unsolved" – addressing the vast credit gap in the small business sector.

Vision: To become the largest small business financing institution in India.

Key Strategic Focus

UGRO Capital's strategic focus centers on providing customized financial solutions to MSMEs through a sector-specific, data-centric, and technology-enabled approach. The company has identified nine key sectors for its services:

1. Healthcare

2. Education

3. Chemicals

4. Food Processing/FMCG

5. Hospitality

6. Electrical Equipment and Components

7. Auto Components

8. Light Engineering

9. Micro Enterprises

This targeted approach allows UGRO Capital to develop deep industry insights and offer tailored financial products that meet the unique needs of businesses within these sectors.

Financials and Funding

Financial Performance

As of June 30, 2024, UGRO Capital reported:

Assets Under Management (AUM): INR 9,218 crore, a 36% year-on-year increase.

Total Income: INR 301.6 crore for Q1 FY25, up 38% YoY.

Profit After Tax (PAT): INR 30.4 crore for Q1 FY25, marking a 20% YoY increase.

Gross Non-Performing Assets (GNPA): 2.0% of total AUM.

Net Non-Performing Assets (NNPA): 1.2% of total AUM.

These figures underscore the company's robust growth trajectory and effective risk management practices.

Funding History

UGRO Capital has successfully raised significant equity capital to support its growth:

2018: Raised INR 900+ crore from institutional investors, including TPG NewQuest, PAG, ADV Capital, Samena Capital, and others.

2023: Secured INR 340 crore, with INR 240 crore from Denmark's IFU (Investeringsfonden for Udviklingslande) and INR 100 crore from other institutional shareholders through a Qualified Institutions Placement (QIP).

2024: Completed an equity capital raise of INR 1,265 crore via Compulsory Convertible Debentures (CCDs) and warrants, with significant commitments from existing investors like Samena Capital and new institutional investors.

The capital raised is primarily utilized for onward lending to MSMEs, strengthening the company's balance sheet, and expanding its technological capabilities.

Technological Platform and Innovation

Proprietary Technologies

UGRO Capital's technological prowess is exemplified by its proprietary underwriting model, GRO Score 3.0. This AI/ML-driven model assesses the creditworthiness of borrowers by analyzing a comprehensive set of data, including banking transactions, credit bureau records, and Goods and Services Tax (GST) information. This approach ensures precise risk assessment and expedites loan approvals.

Significant Scientific Methods

The company employs advanced data analytics and machine learning algorithms to generate over 25,000 data features from an applicant. This data-driven methodology enhances the accuracy of credit risk assessments and facilitates the development of customized financial products.

AI-Driven Capabilities

UGRO Capital's AI-driven capabilities extend to various platforms:

GRO Plus: A module supporting branch-based business in metro cities, providing a fully digital underwriting process integrating all conventional credit parameters.

GRO Chain: A supply chain financing platform enabling real-time disbursements, allowing suppliers to upload invoices approved by anchors for instant access to funds.

GRO Xstream: A co-lending platform integrating with banks and NBFCs via APIs, reducing turnaround times and boosting process efficiency.

GRO X: An application designed for direct, non-intermediated loan applications, empowering MSMEs to apply for loans seamlessly through their mobile devices.

Leadership Team

Key Executives

Shachindra Nath: Founder & Managing Director. Before founding UGRO Capital, Mr. Nath played a pivotal role in establishing insurance companies, global asset management businesses, capital markets, and lending institutions.