UGRO Capital Limited has received a 'CareEdge B+/Stable' rating from CareEdge Global IFSC Limited for its USD 50 million External Commercial Borrowing facility. The rating announcement was made through a regulatory filing dated January 30, 2026, highlighting the company's strong business fundamentals while acknowledging certain operational challenges.

Rating Details and Rationale

The Long-Term Foreign Currency rating reflects UGRO Capital's robust business profile, supported by a substantial and predominantly secured asset base. As of September 30, 2025, the company's Assets Under Management stood at Rs 12,226 crore, with approximately 70% comprising secured products including loan against property and machinery loans.

Business Profile Strengths

UGRO Capital demonstrates strong diversification across multiple dimensions. The company's product suite caters to nine MSME segments, while its geographic diversification remains robust with the top six states accounting for around 65% of AUM. The secured business loan segment accounts for a significant portion of the portfolio, providing stability and reducing credit risk.

The company has delivered exceptional growth, with AUM increasing from approximately Rs 1,300 crore in FY21 to over Rs 12,200 crore by H1FY26, representing a CAGR of nearly 56%. This growth trajectory was further strengthened by the acquisition of Profectus Capital Private Limited, completed on December 08, 2025, at a cost of Rs 1,400 crore.

Asset Quality and Financial Performance

The rating assessment reveals moderate asset quality metrics that partially offset the company's strengths. Key financial indicators as of September 30, 2025, include:

The company's profitability remains modest, primarily due to elevated operating costs at 3.4% on average managed assets for H1FY26 and borrowing costs of approximately 10.3%. These factors have kept the Return on managed assets at 1.0% in H1FY26, compared to 1.2% in FY25.

Strategic Acquisition and Future Outlook

The acquisition of Profectus Capital, which had a loan book of Rs 3,400 crore and net worth of Rs 1,200 crore, is expected to generate synergies through branch rationalization and a more secured product portfolio. Management anticipates benefits from school loans and machinery loans, though the actual impact will be assessed over the next 12-18 months.

Post-acquisition, UGRO's combined AUM stands at approximately Rs 15,500 crore, enhancing diversification with school financing and strengthening prime LAP and machinery finance segments.

Rating Outlook and Sensitivities

The stable outlook reflects CareEdge Global's expectation that UGRO Capital will maintain its current financial and operational profile over the medium term with consistent growth in scale of operations. Upward rating factors include achieving gearing of less than 3x on a sustained basis and RoA exceeding 2% annually. Conversely, downward pressures could emerge if gearing crosses 4x or credit costs exceed 4.5%.

Source: UGRO Capital Limited regulatory filing and CareEdge Global IFSC Limited press release

UGRO Capital Limited has submitted its Asset Liability Management (ALM) statement for the quarter ended 31st December 2025 to BSE Limited and National Stock Exchange of India Limited. The filing, dated 23rd January 2026, complies with SEBI Operational Circular SEBI/HO/DDHS/P/CIR/2021/613 dated 13th April 2022.

Regulatory Compliance and Company Classification

The company is classified as a Non-Deposit taking Systemically Important (NDSI) NBFC under the NBFC - Investment and Credit Company (NBFC-ICC) category. The ALM statement covers the reporting period from 1st October 2025 to 31st December 2025, with all monetary values reported in INR lakhs.

Short Term Dynamic Liquidity Analysis

The ALM statement includes detailed Short Term Dynamic Liquidity analysis across various maturity buckets. The total outflows for the quarter amounted to 790,748.05 lakhs, while total inflows reached 963,048.81 lakhs, resulting in a positive cumulative mismatch of 172,300.76 lakhs.

Key Financial Components

The outflows primarily consisted of increases in loans and advances totaling 484,903.58 lakhs, net decrease in borrowings of 210,704.30 lakhs, and other outflows of 69,174.09 lakhs. Major inflows included net cash position of 111,258.99 lakhs, net increase in borrowings of 357,500.00 lakhs, and interest inflows on performing advances of 65,480.01 lakhs.

Off-Balance Sheet Exposures

The company reported off-balance sheet exposures with total expected outflows of 11,062.67 lakhs and expected inflows of 43,088.46 lakhs. The primary components included guarantees totaling 3,507.13 lakhs and other contingent liabilities of 7,555.54 lakhs.

Structural Liquidity and Interest Rate Sensitivity

The filing also includes comprehensive structural liquidity analysis and interest rate sensitivity statements. The company's borrowings portfolio of 914,436.62 lakhs is distributed across various instruments including bank borrowings, commercial papers, and non-convertible debentures, with appropriate maturity profiling across different time buckets.

Authorized Signatory

The ALM statement was filed by Satish Kumar, Company Secretary and Compliance Officer, demonstrating the company's commitment to regulatory compliance and transparent financial reporting as required for systemically important NBFCs.