Business EconomyPosted at: Jun 18 2025 5:38PM


UGRO Capital to acquire Profectus Capital

Bengaluru, June 18 (UNI) UGRO Capital Limited, a prominent DataTech NBFC focused on MSME lending, on Wednesday announced the signing of a Share Purchase Agreement to acquire 100 percent equity of Profectus Capital Private Limited, a secured lending-focused NBFC, in an all-cash transaction.
The acquisition, funded through UGRO Capital’s recent equity raise, is expected to add approximately Rs 150 crore in annualised profit and deliver immediate scale benefits, including 29 percent AUM growth, without incurring additional origination costs. Following completion, Profectus will operate as a wholly owned subsidiary of UGRO Capital.
According to a company statement, the transaction aligns with UGRO's long-term strategy of scaling its emerging markets and embedded finance verticals. The merger will also add school financing to UGRO’s portfolio, with an estimated Rs 2,000 crore growth potential in the medium term. Cost synergies are projected to yield Rs 115 crore in savings, while post-merger return on assets (ROA) is expected to improve by 0.6–0.7 percent.
As of March 2025, Profectus had an AUM of Rs 3,468 crore across seven states, with 28 branches and over 800 employees. It maintained a gross NPA of 1.6 percent and a net NPA of 1.1 percent. UGRO noted that Profectus’ emphasis on secured lending is well-aligned with its data-driven underwriting model, and the transaction is capital adequacy accretive.
Commenting on the development, UGRO Capital Founder and Managing Director Shachindra Nath said, “This strategically priced acquisition deploys our equity raise to achieve instant scale and Rs 115 crore cost savings, with annualised incremental profitability of Rs 150 crore. Integrating Profectus’ school finance expertise unlocks Rs 2,000 crore growth potential and strengthens our secured asset mix.”
Profectus Capital CEO Mr K V Srinivasan said the transaction was driven by synergies and complementary strengths.
“The coming together of the two organisations would result in greater operational efficiency and profitability,” he noted, while thanking investors for their support in building a process-driven, high-quality portfolio.
The acquisition is subject to customary closing conditions, including shareholder and RBI approvals. Both companies will continue to operate independently during the integration phase.
InCred Capital acted as the exclusive adviser to UGRO Capital on the deal. SNG & Partners served as legal counsel, while PricewaterhouseCoopers Services LLP and Legacy Growth Partners undertook financial and tax due diligence, respectively.
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