UGRO Capital , a DataTech NBFC focused on MSME lending, has announced its financial results for Q2 FY26, showcasing robust growth and strategic initiatives aimed at strengthening its market position.

Key Financial Highlights

The company's Assets Under Management (AUM) reached ₹12,226.00 crore, marking a 20% year-on-year increase. Despite a 9% decrease in net disbursements for Q2 FY26, UGRO Capital's total income surged by 35% to ₹461.00 crore, with Profit After Tax (PAT) growing by 22% to ₹43.30 crore.

Strategic Focus Areas

Emerging Market Expansion

UGRO Capital has completed its planned expansion in the Emerging Market (EM) vertical, with 303 branches across 13 states contributing 25% to the total AUM. The company is now shifting focus from expansion to improving branch-level productivity and profitability.

Embedded Finance Growth

The company's embedded finance platform, MyShubhLife (MSL), has shown significant traction:

• AUM reached ₹1,270.00 crore within four quarters
• Serving over 1.5 lakh small retailers
• Q2 FY26 disbursements stood at ₹713.00 crore

Capital and Liability Strengthening

UGRO Capital raised ₹535.00 crore in equity capital, earmarked for the acquisition of Profectus Capital. The company's total borrowings increased to ₹8,088.00 crore, with the cost of borrowing improving to 10.37%, a 38 bps year-on-year reduction.

Asset Quality and Collection Efficiency

• GNPA at 2.4% of AUM
• 93% of assets in Stage-1
• 100% total collection efficiency in Q2 FY26

Management Commentary

Shachindra Nath, Founder and Managing Director of UGRO Capital, stated, "Q2'FY26 marked a period of strategic recalibration and operational steadiness. With the Emerging Market network now at 303 branches and the Embedded Finance platform scaling rapidly, UGRO is entering a phase of structural profitability improvement."

Future Outlook

UGRO Capital is poised for sustained growth with its diversified product offerings and strong focus on data-driven lending. The company's strategic initiatives, including the expansion of its Emerging Market presence and the scaling of its Embedded Finance platform, are expected to drive profitability and market share in the coming quarters.

As UGRO Capital continues to leverage its DataTech capabilities and expand its reach in the MSME lending space, it remains well-positioned to capitalize on the growing credit demand in this sector.

UGRO Capital , a leading non-banking financial company (NBFC), has taken a significant step to strengthen its capital base. The company's Investment and Borrowing Committee has approved the issuance of up to 5,000 non-convertible debentures (NCDs) worth Rs 500.00 crore, with an additional green shoe option of Rs 1,000.00 crore.

Key Details of the Debenture Issue

Strategic Implications

This move is strategically important for UGRO Capital as it aims to bolster its Tier II capital. The company plans to use this subordinated debt to enhance its capital adequacy in line with the Reserve Bank of India's (RBI) regulations, specifically the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023.

Financial Structure

The debentures will be redeemed at par upon maturity. In case of any delay in interest or principal payments, a default interest of up to 2% per annum may apply, as agreed between the company and investors.

Market Impact

This substantial capital raise could potentially strengthen UGRO Capital's position in the NBFC sector, providing it with additional resources to expand its lending activities and maintain regulatory compliance. The successful placement of these debentures may also reflect positively on investor confidence in the company's financial health and growth prospects.

As the financial landscape continues to evolve, particularly for NBFCs, such capital-raising initiatives are crucial for maintaining robust balance sheets and supporting sustainable growth. Investors and market watchers will likely keep a close eye on how UGRO Capital utilizes this additional capital to drive its business forward in the competitive NBFC space.