UGRO Capital Limited has announced the withdrawal of its proposed issuance of Non-Convertible Debentures under Series 2, reversing an earlier decision made by the company's Investment and Borrowing Committee. The company communicated this development to both BSE Limited and National Stock Exchange of India Limited on December 24, 2025.

Committee Decision Reversal

The withdrawal comes just a week after the Investment and Borrowing Committee meeting held on December 17, 2025, which had approved the issuance of listed, rated, senior, secured/unsecured, transferable, redeemable Non-Convertible Debentures on a private placement basis. The committee had initially planned the issuance in one or more tranches under Series 2.

Regulatory Compliance

The notification was made pursuant to Regulation 30 read with Regulation 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. UGRO Capital has informed both stock exchanges about this corporate development, maintaining transparency with regulatory authorities and investors.

Internal Considerations

The company cited internal considerations as the reason for withdrawing the proposed debenture issuance. The decision was taken on December 22, 2025, indicating a swift reassessment of the funding strategy within days of the original approval. No specific details were provided regarding the nature of these internal considerations.

Company Information

The communication was signed by Satish Kumar, Company Secretary and Compliance Officer of UGRO Capital Limited. The company operates under CIN L67120MH1993PLC070739 and maintains its registered office at Equinox Business Park, Tower 3, 4th Floor, LBS Road, Kurla (West), Mumbai-400070. The information has been made available on the company's website at www.ugrocapital.com for stakeholder reference.

Fusion Finance has been assigned a CARE A (RWN) rating by CARE Ratings for its proposed ₹150 crore Non-Convertible Debenture (NCD) issue. The rating agency has also maintained the Rating Watch with Negative implications on the company's existing ₹1,500 crore long-term bank facilities. This rating action was communicated through a letter dated December 16, 2025.

Rating Action Summary

The comprehensive rating action by CARE Ratings encompasses both new and existing financial instruments:

The Rating Watch with Negative implications reflects ongoing concerns about the company's financial covenant compliance and overall credit profile.

Financial Covenant Challenges

The negative rating watch stems from significant covenant breaches affecting a substantial portion of Fusion Finance's borrowing portfolio. As of September 30, 2025, the company was in breach of financial covenants on borrowings totaling ₹2,077 crore, resulting in these facilities becoming repayable on demand.

The covenant breach situation presents a mixed picture:

Despite these covenant breaches, CARE Ratings notes that no lender has demanded immediate repayment or charged penal interest from the company.

Liquidity and Capital Position

Fusion Finance maintains adequate liquidity despite the covenant challenges. The company holds comfortable liquidity of ₹892 crore with unavailed sanctioned credit lines of ₹2,730 crore as of September 30, 2025. The company successfully raised ₹1,554 crore in funding during H1 FY26, demonstrating continued lender support.

The capital position has been strengthened through equity infusion:

Asset Quality and Performance Indicators

The company's asset quality metrics show improvement in H1 FY26, primarily due to write-offs. Gross Non-Performing Assets (GNPA) improved to 4.61% as of September 30, 2025, compared to 7.90% as of March 31, 2025. Net NPA stood at 0.38% versus 0.30% in the previous period.

Fusion Finance's Assets Under Management (AUM) declined to ₹7,038 crore as of September 30, 2025, from ₹8,980 crore as of March 31, 2025, reflecting the challenging operating environment in the microfinance sector.

Business Operations and Market Presence

Fusion Finance operates across 22 states and union territories with a diversified geographical presence. The company's top three states by exposure are Uttar Pradesh (26%), Bihar (19%), and Madhya Pradesh (9%). The company has expanded into the MSME sector, with this segment comprising 10% of total AUM as of September 30, 2025, up from 0.03% in March 2020.

The rating agency expects the company's asset quality and profitability to improve gradually, with visible improvement anticipated in FY27. The company's ability to maintain lending relationships while raising funds at competitive rates remains a key monitoring factor for future rating actions.