UGRO Capital has made a significant reversal in its debt market strategy, deciding to re-open the issuance of Non-Convertible Debentures (NCDs) worth ₹100 crores under Series 2. This decision comes just two days after the company had withdrawn the proposed issuance on December 22, 2025.

Recent Developments in NCD Issuance

The company's latest corporate action demonstrates the dynamic nature of capital market decisions. The timeline of recent events shows the company's evolving approach to debt fundraising:

Original NCD Structure and Features

The company's Investment and Borrowing Committee had previously approved a comprehensive NCD structure with attractive features for investors:

Strategic Implications

The re-opening of the NCD issuance indicates UGRO Capital's continued focus on diversifying its funding sources through debt market instruments. The decision to reverse the withdrawal suggests that market conditions or internal strategic considerations have evolved favorably for the issuance.

The NCDs offer several attractive features including a competitive 9.50% annual coupon rate with monthly payments, strong security backing through first-ranking charge on loan receivables, and a relatively short 15-month tenure. The green shoe option provides additional flexibility to raise up to ₹200 crores in total if market demand warrants.

Market and Regulatory Compliance

UGRO Capital has maintained full transparency regarding these developments, promptly informing both BSE Limited and National Stock Exchange through regulatory filings under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has also made this information available on its corporate website at www.ugrocapital.com .

This development will be closely watched by investors and market participants as an indicator of the company's capital allocation strategy and market confidence in its debt instruments. The successful placement of these NCDs could provide UGRO Capital with additional resources for expanding its lending activities and supporting business growth in the financial services sector.

UGRO Capital Limited has received positive credit rating actions from two major rating agencies following the successful completion of its acquisition of Profectus Capital Private Limited (PCPL). Both India Ratings Research Private Limited and CRISIL Ratings Limited have affirmed the company's credit ratings while removing their respective rating watch statuses.

India Ratings Affirms Ratings with Positive Outlook

India Ratings has taken comprehensive rating actions across UGRO Capital's debt instruments, affirming ratings at IND A-/Positive outlook. The agency has removed the Rating Watch with Positive Implications status that was previously maintained on the company's instruments.

CRISIL Reaffirms Ratings at Stable Outlook

CRISIL Ratings Limited has also reaffirmed UGRO Capital's ratings while removing the Rating Watch with Developing Implications status. The agency has assigned a Stable outlook to the company's instruments.

Acquisition Details and Strategic Impact

The rating actions follow UGRO Capital's completion of its acquisition of 100% stake in Profectus Capital Private Limited for an aggregate cash purchase consideration of ₹1,398.60 crores. The acquisition was announced on June 17, 2025, and completed on December 8, 2025, making Profectus a wholly-owned subsidiary of UGRO Capital.

The acquisition significantly enhances UGRO Capital's market position in the MSME lending space. The combined entity will have consolidated assets under management (AUM) estimated to be around ₹15,000 crores, with the merged entity expected to benefit from:

• Enhanced presence in prime loan against property (prime LAP) and machinery finance segments
• Product diversification through addition of school financing portfolio
• Higher proportion of secured lending and on-book portfolio
• Diversification of lender base
• Expected synergies of around ₹120 crores through cost rationalization

Financial Performance and Business Metrics

UGRO Capital has demonstrated strong growth in its franchise, with AUM growing to ₹12,200 crores in H1 FY26 from ₹12,000 crores in FY25 and ₹9,050 crores in FY24. The company operates through 325 branches across 12 Indian states, with 23 prime branches and 302 emerging market branches.

Key financial highlights include:

Rating Rationale and Outlook

Both rating agencies highlighted several key strengths supporting their affirmations:

Strengths:

• Strong growth in franchise with diversified MSME exposure
• Adequate capital buffers with demonstrated capital raising ability
• Significant off-book proportion supporting profitability
• Diversified funding mix and lender base
• Geographic and sectoral diversification across MSME value chain

Areas of Focus:

• Moderate profitability due to elevated operating expenses
• Asset quality seasoning needs to be established
• Integration and realization of synergies from the acquisition

The Positive outlook from India Ratings reflects expectations of continued franchise growth and strengthening market position, while CRISIL's Stable outlook indicates confidence in the company's ability to maintain its credit profile post-acquisition.

Liquidity and Capital Position

UGRO Capital maintains adequate liquidity with total liquid resources of around ₹2,200 crores as of September 2025, comprising unencumbered cash, liquid investments, and unutilized bank lines. This provides sufficient coverage for debt obligations while supporting business growth requirements.

The company has successfully raised ₹910 crores in H1 FY26 through compulsory convertible debentures (₹530 crores) and rights issue (₹380 crores), with the CCD proceeds used to finance the Profectus acquisition. The combined entity is expected to maintain leverage below 4.0x on a steady-state basis.