U GRO Capital Raises INR 250 Cr Debt From Dutch Development Bank FMO

SUMMARY

U GRO Capital raised the funding via INR-denominated NCDs, which were fully subscribed by FMO

U GRO Capital is a lendingtech platform focussed on MSMEs and is listed on the NSE and the BSE

The debt funding comes months after U GRO Capital raised INR 340 Cr ($41.3 Mn) from Denmark government’s development financial institution and long-term shareholders

U GRO Capital, a non-banking financial company with a focus on lending to MSMEs, has raised INR 250 Cr (about $30Mn) via non-convertible debentures from FMO, the Dutch entrepreneurial development bank.

In a statement, the company said that its INR-denominated NCDs issuance was fully subscribed by FMO.

Founded in 2018 by Shachindra Nath, U GRO Capital is listed on the NSE and the BSE. It claims to have provided credit to over 80,000 small businesses over the last five years.

In a statement, the NBFC said that approximately 20% of its total borrowings are sourced from development financial institutions and impact funds, both domestically and internationally. Notable contributors include ResponsAbility, Calvert Impact Capital, Enabling Qapital, SIDBI, among others.

Commenting on the latest fundraise, Nath, founder and managing director of U GRO Capital, said, “This transaction is proof of U GRO Capital’s ability to forge partnerships with and attract funding from reputed global DFIs. We share a common vision of financial inclusion with impact funding organisations and are excited to collaborate with FMO to meet the diverse financial needs of India’s underserved MSMEs…”

The debt funding comes months after U GRO Capital raised INR 340 Cr ($41.3 Mn) from IFU, the Denmark government’s development financial institution, and long-term shareholders.

U GRO Capital reported a profit after tax of INR 28.9 Cr in the second quarter of the financial year 2023-24 (FY24), registering a 14% growth over INR 25.2 Cr profit reported in the previous quarter.

In India, it competes with startups like Indifi and Lendingkart, and other traditional banks and NBFCs.

According to an Inc42 report, the country’s fintech market is anticipated to become a $1.3 Tn market opportunity by 2025. Of this, the lendingtech subsector is expected to account for $616 Bn.