UGRO Capital , a non-banking financial company (NBFC), has taken a significant step to strengthen its capital base by issuing non-convertible debentures (NCDs) worth INR 50 crore. This move comes as part of the company's strategy to enhance its capital adequacy in line with the Reserve Bank of India's (RBI) Scale Based Regulation Directions, 2023.

Key Details of the NCD Issuance

The Investment and Borrowing Committee of UGRO Capital approved the allotment of 5,000 unsecured, rated, subordinated non-convertible debentures. Here are the essential details of the issuance:

Strategic Implications

This subordinated debt issuance serves a dual purpose for UGRO Capital:

1. Capital Adequacy Enhancement: The NCDs will be classified as Tier II capital, directly contributing to the company's capital adequacy ratio. This aligns with the RBI's guidelines for NBFCs under the Scale Based Regulation Directions, 2023.

2. Regulatory Compliance: By bolstering its Tier II capital, UGRO Capital is proactively ensuring compliance with regulatory requirements, potentially positioning itself for sustainable growth.

Market Impact

The successful placement of these NCDs may be viewed positively by the market, as it demonstrates UGRO Capital's ability to raise funds and strengthen its balance sheet. This could potentially enhance investor confidence in the company's financial stability and growth prospects.

Conclusion

UGRO Capital's decision to issue INR 50 crore worth of NCDs as Tier II capital reflects a strategic move to reinforce its financial position. As the financial services sector continues to evolve under new regulatory frameworks, such capital-raising initiatives may become increasingly common among NBFCs aiming to ensure robust capital structures and regulatory compliance.

Investors and market watchers will likely keep a close eye on how this capital infusion translates into UGRO Capital's business performance and regulatory standing in the coming quarters.

UGRO Capital Limited, a non-banking financial institution, has submitted monitoring agency reports for the quarter ended September 30, 2025, confirming the proper utilization of funds raised through its recent preferential and rights issues. The reports, prepared by India Ratings & Research Private Limited, indicate no deviation from the stated objectives for both capital-raising initiatives.

Preferential Issue Details

The preferential issue, which raised INR 513.37 crores, was allocated as follows:

Rights Issue Utilization

The rights issue, which raised INR 380.72 crores, was deployed as per the following breakdown:

Key Highlights

• Both issues show full compliance with the stated objectives in their respective offer documents.
• The preferential issue funds have been completely utilized across all designated purposes.
• For the rights issue, the majority of funds (INR 360 crores) have been used to strengthen the company's capital base and support business activities.
• A small portion of the rights issue proceeds (INR 0.04 crores) has been used for issue-related expenses, with the remaining funds yet to be utilized.
• The unutilized amount from the rights issue (INR 20.72 crores) is currently held in an IDFC Bank account.

Additional Corporate Actions

In addition to the fund utilization report, UGRO Capital has also disclosed other significant corporate actions:

1. Conversion of Compulsorily Convertible Debentures (CCDs): The company has allotted 13,51,308 equity shares at INR 185 per share (including a premium of INR 175) to CCD holders who exercised their conversion rights.

2. Planned Debt Issuance: UGRO Capital's Investment and Borrowing Committee is scheduled to meet on November 19, 2025, to consider raising funds through the issuance of Non-Convertible Debentures via private placement.

These actions, along with the proper utilization of funds from the preferential and rights issues, demonstrate UGRO Capital's commitment to strengthening its financial position and supporting its business growth objectives in the non-banking financial sector.

The monitoring agency reports provide assurance to investors that UGRO Capital is deploying the raised capital in line with its stated intentions, potentially enhancing stakeholder confidence in the company's financial management and growth strategies.