UGRO Capital to acquire Profectus Capital for Rs 1,400 crore deal

Rs 1,398.6 crore all-cash acquisition will boost UGRO's MSME lending scale, add school finance, and improve profitability and secured asset mix

UGRO Capital Ltd, a BSE-listed non-banking financial company (NBFC), will acquire 100 per cent stake in Profectus Capital Private Ltd for an aggregate ₹1,398.60 crore. With the funds, UGRO plans to scale up financing to micro, small and medium enterprises (MSMEs).

 

Profectus, an NBFC backed by private equity firm Actis, had assets under management (AUM) of ₹3,468 crore as of March 2025. It has presence across seven states through a 28-branch network and over 800 members, according to UGRO’s filing with the BSE.

 

The proposed acquisition would be funded from the proceeds of the preferential issue of compulsory convertible debentures. The deal is subject to shareholder and regulatory approvals.

 

 

The acquisition amount is payable in cash in a single tranche on closing of transaction.

 

Ugro Capital stock closed 1.13 per cent lower at ₹171.3 per share on BSE.

 

Shachindra Nath, founder and managing director, UGRO Capital, said, this strategically-priced acquisition deploys the equity fundraise to achieve instant scale. 

 

It will give cost savings of ₹115 crore and annualised incremental profitability of ₹150 crore, thus boosting return on assets by 0.6–0.7 per cent.

 

"Also, integrating Profectus' expertise in financing of schools unlocks ₹2,000 crore growth potential and strengthens the secured asset mix – accelerating UGRO's journey to become India's largest MSME lender,” he added.

 

UGRO Capital, with pan Indian presence from Tier-I to Tier-IV cities, had AUM of ₹12,003 crore as of March 31, 2025.

 

InCred Capital acted as the exclusive advisor to UGRO Capital on this acquisition transaction. SNG & Partners was engaged as legal counsel to the company.

 

For this transaction, the company appointed PriceWaterHouseCoopers Services LLP for financial due diligence and Legacy Growth Partners for tax due diligence.