UGRO Capital , a non-banking finance company (NBFC), has announced plans to issue non-convertible debentures (NCDs) to raise funds and bolster its capital adequacy. The company's Investment and Borrowing Committee has approved the issuance of unsecured, rated, subordinated, listed, taxable, redeemable NCDs through a private placement.

Issue Details

Purpose and Implications

The NCD issue is designed to raise subordinated debt as Tier II capital, aimed at enhancing UGRO Capital's capital adequacy. This move aligns with the Reserve Bank of India's (RBI) Master Direction for Non-Banking Financial Company – Scale Based Regulation Directions, 2023.

Key Features of the NCDs

• Security: The NCDs will be unsecured.
• Interest Payment: Interest is payable on a monthly basis.
• Redemption: The principal amount will be redeemed on the maturity date.
• Default Interest: In case of delayed payments, an additional interest of up to 2.00% per annum may be applicable.

Investor Considerations

Potential investors should note that these NCDs are subordinated, which typically implies a higher risk profile compared to senior debt. However, the higher indicative coupon rate of 11.65% p.a. may be attractive to those seeking higher yields and willing to accept the associated risks.

UGRO Capital's decision to issue NCDs comes at a time when NBFCs are increasingly looking to diversify their funding sources and strengthen their capital base. The success of this issue could provide insights into investor appetite for NBFC debt instruments in the current market environment.

As always, investors are advised to carefully review the terms and conditions of the issue and consider their risk appetite before making investment decisions.

UGRO Capital Limited has successfully completed the allotment of non-convertible debentures (NCDs) worth ₹150 crore through private placement. The company's Investment and Borrowing Committee of the Board of Directors approved the allotment on December 16, 2025, marking a significant milestone in the company's debt fundraising strategy.

NCD Allotment Details

The latest regulatory filing reveals comprehensive details of the debenture issuance:

Security and Risk Management

UGRO Capital has established robust security measures for the debenture holders. The company will maintain a minimum security cover of 1.10 times at all times during the tenure of the debentures over loan receivables, both present and future, that fulfill specific eligibility criteria. This security arrangement provides additional protection for investors and demonstrates the company's commitment to risk management.

Payment Terms and Default Provisions

The NCDs feature a structured payment mechanism with monthly coupon payments at 9.99% per annum. In case of delays in payment of interest or principal amount for more than three months from the due date, the rate increases to coupon rate plus 2.00% per annum. The debentures will be redeemed at par value upon maturity, providing clarity on the redemption process.

Regulatory Compliance and Transparency

The allotment was executed in compliance with Regulation 30 and 51 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has made the information available on its website at www.ugrocapital.com , ensuring transparency and adherence to regulatory requirements. This systematic approach to disclosure reinforces investor confidence in the company's governance practices.

The successful completion of this NCD allotment demonstrates UGRO Capital's ability to access debt markets effectively and provides the company with additional capital for its business operations and growth initiatives in the financial services sector.