You are here » Home » Companies » Company Overview » Ugro Capital Ltd

Ugro Capital Ltd.

BSE: 511742 Sector: Financials
NSE: UGROCAP ISIN Code: INE583D01011
BSE 00:00 | 11 Aug 179.75 1.95
(1.10%)
OPEN

178.55

HIGH

182.50

LOW

175.75

NSE 00:00 | 11 Aug 179.85 2.55
(1.44%)
OPEN

179.00

HIGH

182.00

LOW

176.30

OPEN 178.55
PREVIOUS CLOSE 177.80
VOLUME 21180
52-Week high 229.00
52-Week low 110.00
P/E 62.85
Mkt Cap.(Rs cr) 1,268
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 178.55
CLOSE 177.80
VOLUME 21180
52-Week high 229.00
52-Week low 110.00
P/E 62.85
Mkt Cap.(Rs cr) 1,268
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ugro Capital Ltd. (UGROCAP) - Chairman Speech

Company chairman speech

"Research suggests there exists an opportunity to connect with over 5 millionregistered MSMEs in target states a large majority of them would ^be away from the urbancenter. We have created business assessment frameworks for most dominant business profilesacross chosen micromarkets and rely on our strengths of data and technology to facilitatecredit deeper into the ecosystem"

Dear Shareholders

The last fiscal has been unprecedent in terms of the global economic activity inover150 odd years. As the pandemic reached its first peak survival was the overarching theme.As the incidence of the pandemic was reined it with the imposition of the nationwidelockdown the economy reeled with problems of broken supply chains reverse labourmigration and drying up of liquidity. Revival was led by several active measures taken bygovernment S- RBI to stimulate the economy. Revival in our context meant adaptation andrecalibration in our approach at every step which required agility nimbleness and mostimportantly an attitude to embrace change. Change for us meant hyper digitization anddigitalization. With the measures taken by us we are well positioned to capture the MSMElending opportunity in the upcoming years.

The overall opportunity in MSME market is approximately $600 Bn. Of this huge marketopportunity only $250 Bn is currently served by the formal lending institutions. That isalmost 60% of the MSME lending opportunity is currently served by informal sources whichcharge exorbitant rates of interest. on a closer look we found that of this 60% majorityof the MSMEs belong to the Micro enterprise category. These micro enterprises lack properdocumentation & record keeping which makes it difficult for the traditional lenders toevaluate their credit worthiness. our founding belief was to design our platform on tenetsthat brings these MSMEs into the fold of formal lending.

With a view to achieve financial inclusion we have set out a target to capture 1% ofthe MSME lending market in next 5 years. This would translate to an AUM of roughly Rs.20000 Cr. To achieve this AUM U GRo has set-up a four-pronged asset engine. These areBranch-led channel (Prime & Micro Branches) Eco-system Channel (Supply Chain &Machinery Loan Financing) Partnership & Alliances channel (NBFC / FinTech companies)& Direct Digital Channel.

On the asset side this year we took several new initiatives:

a) Under the branch led channel we made a strategic pivot with the launch of our microbusiness. We operationalised 25 new Micro Branches across 5 different states. This takesthe total tally of our branches to 34. This particular channel shall be a key lever inrealising our 5-year plans.

b) The year also saw the launch of our product lines which enables us to cater to theentire spectrum of the market. This includes the launch of our much- vaunted co-lendingproduct Pratham with Bank of Baroda.

c) Under Eco-system channel we continued the momentum in addition of new anchors inour supply chain channel. Notably we had a very successful launch of our MachineryFinance product which not only saw a rapid scale up during the year but also saw a widefootprint across the country within months.

d) Under Partnership & Alliances channel we grew via both the levers - addition onnew partners/ FinTechs and increase in disbursement throughput per partner. Furthermoreour exposure is covered by at least 10% First Loss Default Guarantee provided to us by thepartner.

We saw significant traction on the liability side. The strength of our business modelwas also well recognised by the entire liability market.

a) During the year we increased our lender base from 7 to 29 with addition of lendersfrom across the entire spectrum of public & private sector Banks NBFCs DFIs etc.

. b) our focus in the current year would be to get long term debt capital fromDevelopment Finance Institutions. We have adequate liquidity and liability pipeline tofund our growth ambitions.

We also utilised the year in upgrading & improving our systems people andprocesses during the year. We took several measures to better align the business functionto bring operational synergies in them.

• We rationalised our organisation structure by merging risk & analyticsfunctions under Chief Risk officer demerged Finance & Treasury functions &combined operations & finance vertical under Chief Finance & operations officer.

• During the year we continued to invest in improving our technologicalcapabilities. And it gives me great pride to announce that U GRo Capital was the firstlenders on the Government e-Marketplace (GeM). We have achieved a seamless end-to-endtechnological integration with the GeM portal which enables us to provide creditdecisioning at rapid pace.

• We also made our digital Supply Chain Platform live. With this importantmilestone we have achieved a low manual intervention system. This is a breakthroughachievement as it primes our ecosystem channel to achieve scale.

While FY2020-21 was a year that posed several challenges with the hostilemacro-economic environment the year helped us to revisit realign and redefine ourstrategy and now we have built all the required systems and processes. Inspite of thesechallenges I am glad to share that your company has posted a PBT of Rs. 12.12 Cr. I'mconfident that U GRo Capital will continue to strive in the coming years and achieve itsset goals.

.