UGRO Capital Limited's board of directors has approved a comprehensive scheme of amalgamation with its wholly-owned subsidiary Profectus Capital Private Limited (PCPL) during a meeting held on January 8, 2026. The merger represents a strategic consolidation move aimed at enhancing operational efficiencies and strengthening the company's market position in the MSME financing sector.

Merger Details and Structure

The amalgamation scheme involves merging PCPL, a wholly-owned subsidiary, with UGRO Capital under Sections 230-232 read with Section 52 of the Companies Act, 2013. Upon completion, PCPL will be dissolved without winding up, and the shares held by UGRO Capital in PCPL will stand cancelled without any consideration being paid.

Business Alignment and Synergies

Both entities operate in complementary segments of the MSME financing space. PCPL is a non-deposit taking NBFC classified as middle layer NBFC, registered with RBI, providing secured lending to micro, small and medium enterprises. The company offers customized products with cluster-specific features and also undertakes factoring business on TReDS platform.

UGRO Capital specializes in MSME and Small Business Financing, providing a diversified portfolio including business loans, loans against property, machinery and equipment finance, and working capital support. The merger creates significant geographic and product alignment in secured loan against property and machinery finance segments.

Strategic Rationale

The board identified several key benefits from the amalgamation:

• Enhanced Asset Mix: The combined entity will feature higher secured assets, providing impetus to scale Emerging Market and Embedded Finance businesses
• Operational Synergies: Significant alignment in secured LAP and machinery finance facilitating operational efficiencies
• Cost Optimization: Reduction in management overlaps and elimination of legal and regulatory compliance costs
• Capital Efficiency: Optimal utilization of capital and enhanced operational management efficiencies
• Human Capital: Improved organizational capability through pooling of diverse skills and leadership

Regulatory Approvals and Timeline

The scheme requires comprehensive regulatory clearances before implementation. Key approvals needed include sanction from National Company Law Tribunal (NCLT), and clearances from stock exchanges, SEBI, RBI, shareholders, creditors, and other statutory authorities as required.

Additional Board Decisions

In a separate but significant decision, the board approved an increase in the borrowing limit for Commercial Papers from ₹500 crore to ₹800 crore. This enhancement in borrowing capacity, building on earlier board approval from April 26, 2025, will support the company's expansion plans and working capital requirements.

The board meeting, which commenced at 4:30 PM and concluded at 6:30 PM, also delegated powers to Principal Officers under Section 179 of the Companies Act, 2013. The approved scheme will be made available on the company's website at www.ugrocapital.com following submission to stock exchanges.

UGRO Capital Limited's Board of Directors has approved a comprehensive amalgamation scheme with its wholly owned subsidiary, marking a significant step in the company's consolidation strategy. The board meeting held on January 8, 2026, approved the Scheme of Amalgamation with Profectus Capital Private Limited (PCPL) under Sections 230-232 read with Section 52 of the Companies Act, 2013.

Merger Details and Regulatory Framework

The amalgamation scheme requires extensive regulatory approvals from multiple authorities. The merger is subject to sanction from the National Company Law Tribunal (NCLT) and approvals from stock exchanges, Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), shareholders, creditors, and other statutory authorities as required.

Financial Profile of Merging Entities

The financial performance of both entities demonstrates substantial business operations across the MSME financing sector.

PCPL Financial Performance:

UGRO Capital Financial Performance:

Business Operations and Strategic Rationale

Both entities operate as non-deposit taking NBFCs classified as middle layer NBFCs registered with RBI. PCPL specializes in secured lending to micro, small and medium enterprises (MSMEs) and offers customized products with cluster-specific features. The subsidiary also undertakes factoring business on Trade Receivables electronic Discounting System (TReDS) platform.

UGRO Capital provides diversified financial products including business loans, loans against property, machinery and equipment finance, and working capital support to MSMEs. The merger aims to achieve several strategic objectives:

• Strengthened asset mix with higher secured assets to scale Emerging Market and Embedded Finance businesses
• Geographic and product alignment in Secured Loan Against Property (LAP) and Machinery Finance
• Operational synergies for expansion and sustainable growth
• Optimal capital utilization and enhanced operational efficiencies
• Reduction in management overlaps and regulatory compliance costs
• Improved organizational capability through pooling of diverse human capital

Additional Board Decisions

The board also approved an increase in borrowing limits for Commercial Papers from ₹500 crores to ₹800 crores, building upon the board approval dated April 26, 2025. Powers have been delegated to Principal Officers under Section 179 of the Companies Act, 2013.

Transaction Structure

Since PCPL is a wholly owned subsidiary, no cash consideration or share exchange will occur. Upon the scheme becoming effective, shares held by UGRO Capital in PCPL will stand cancelled without any further action. The merger will not result in any change to UGRO Capital's equity shareholding pattern, as confirmed in the regulatory filing.