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Ugro Capital Ltd.

BSE: 511742 Sector: Financials
NSE: N.A. ISIN Code: INE583D01011
BSE 00:00 | 03 Jul 102.85 -5.15
(-4.77%)
OPEN

105.50

HIGH

105.50

LOW

102.60

NSE 05:30 | 01 Jan Ugro Capital Ltd
OPEN 105.50
PREVIOUS CLOSE 108.00
VOLUME 1701
52-Week high 225.00
52-Week low 74.60
P/E 37.13
Mkt Cap.(Rs cr) 725
Buy Price 102.60
Buy Qty 10.00
Sell Price 102.85
Sell Qty 40.00
OPEN 105.50
CLOSE 108.00
VOLUME 1701
52-Week high 225.00
52-Week low 74.60
P/E 37.13
Mkt Cap.(Rs cr) 725
Buy Price 102.60
Buy Qty 10.00
Sell Price 102.85
Sell Qty 40.00

Ugro Capital Ltd. (UGROCAPITAL) - Chairman Speech

Company chairman speech

Dear Shareholder

The year gone by was an assimilation of our aspirations to create a platform to"Solve the Unsolved" - the US $600 B SME credit availability problem in ourcountry.

To this end 2019 saw us close one of the largest fund-raises for a start-up raisingINR 953 crores from a diverse and marquee base of investors; we completed the acquisitionof Chokhani Securities and embarked on the U GRO journey.

We believe that knowledge and technology are key to solving the SME credit availabilityproblem in the country. To this end our 80+ employees have done a phenomenal job ofcreating a highly specialized technology enabled distribution and underwriting platform.

Knowledge for us means a deep understanding of the customer - their needs behavior andthe ecosystem in which they operate. In pursuit of this goal we embarked on a journey ofnarrowing down the sectors on which to focus on - and after careful analysis of 180+sectors we narrowed down on eight sectors each representing large consumption drivenmarkets and relatively less influenced by macro-economic tailwinds. The selected sectorsare Healthcare Education Chemicals Food Processing & FMCG Hospitality ElectricalEquipment & Components Auto Components and Light Engineering.

Within these eight sectors we further decided to specialize on 37+ sub-sectors inselect SME clusters and build specific customer solutions for these sub-sectors.

Technology underpins every aspect of our lending process - we have integrated 25+ APIintegrations built 8 sectoral statistical scorecards 30 sub-sectoral expert scorecardsstate-of-the-art bank bureau and GST statement analyzers automated policy approvalsdeveloped machine learning OCR technology to deliver an industry first 60 min in-principalapproval to the customer. However we certainly are not disregarding traditional methodsthat have been historically successful in this space. Instead we are blending the best ofboth fin-tech and fin-touch by supplementing our 60 min in principal approval with all thetraditional checks and balances.

We are also in the process of creating a unique multi-pronged distribution modelsupplementing the traditional branch led model with partnership led models and direct tocustomer models. We started disbursals on Jan 15 2019 and have already disbursed 82crores by March 2019 - a testament to the strength of our distribution. The company is inthe process of building a 4-pronged distribution network which is scalable technologyenabled and highly specialized

• Intermediary led: In a short span of 3 months the company has started 7branches onboarded 80 channel partners who are operating at industry leadingproductivities

• Partnership led: The company has built a separate vertical headed by the ChiefGrowth Officer to build partnerships in prioritized segments and tap into the partners'network of distributors dealers suppliers through an ecosystem-based lending strategy.

• BFSI led: The company is in the process of creating a partner network ofspecialized NBFCs with a view of entering into co- origination/assignment partnershipswith them

• Direct to Customer: The company is also planning on launching adirect-to-customer digital channel in the second half of Fy20

On the liability side the company aspires to be strike an optimal balance betweenbalance sheet and off-balance sheet lending leveraging co-origination and securitizationto improve returns ability to cater to customers of all risk segments increase scale andminimize ALM mismatches.

FY 2019 was a turbulent year for lenders particularly NBFCs. Idiosyncratic issues at afew NBFCs have led to a broader crisis of confidence and liquidity crunch in the market.The crisis reemphasizes the importance of a strong corporate governance framework. We at UGRO pride ourselves in being a truly board driven management run company - settingindustry leading standards of corporate governance. To this effect the company hasonboarded pre-eminent professionals from regulatory bodies like RBI SEBI developmentalfunds like SIDBI the Indian government and with deep expertise in audit and compliancefunctions. The company has also incorporated the principal tenets of corporate governancein its articles of association so that these are preserved for perpetuity.

Although the liquidity crunch has not had an impact on the company we believe in beingnimble footed and having our ears to the ground. We are confident that our risk managementframeworks and our asset liability management will see us through the crisis unscathed.

The path ahead of us is a long and arduous one to be sure. However while it may befraught with the dangers of present market conditions it offers bountiful opportunity aswell. The challenging circumstances have greatly increased the emphasis on competencewhich has resulted in the space becoming more meritocratic in nature. This is anenvironment we are more than happy to embrace at U GRO as we look to rapidly scale intoone of the industry's major players. We have firm belief in our technology and knowledgefocused approach to SME Lending and we hope that you too will keep faith with us on ourjourney.

Yours Sincerely

Shachindra Nath

Executive Chairman & Managing Director

U GRO Capital Limited