UGRO Capital Acquires Profectus | ₹1400 Cr Deal
UGRO Capital has strategically acquired Profectus Capital in an all-cash deal,a move poised to significantly enhance its MSME lending capabilities and expand its footprint in key emerging markets. This acquisition brings Profectus’ considerable ₹3,468 Crores in assets under management into the fold, promising a 29% immediate boost to UGRO’s portfolio. the merger is projected to yield considerable cost savings and incremental profitability. This strategic investment is set to accelerate UGRO’s journey, strengthening its position as a leading lender supporting the MSME sector. News Directory 3 reports on the pivotal developments as the finance sector evolves. Discover what’s next as UGRO Capital integrates Profectus and drives towards further growth.
UGRO Capital Acquires Profectus Capital to Expand MSME Lending Reach
Updated June 18, 2025
UGRO Capital Limited, a DataTech NBFC focused on MSME lending, has acquired Profectus Capital Private Limited in an all-cash transaction. The deal aims to bolster UGRO’s commitment to the MSME ecosystem through tailored, embedded finance solutions and expand its reach in emerging markets.
The acquisition, funded by UGRO’s recent equity raise, will integrate Profectus as a wholly-owned subsidiary. UGRO anticipates an increase of approximately ₹150 Crores in annualized profit, enhancing its capital adequacy.
The move is expected to immediately increase UGRO’s assets under management by 29%, diversifying its portfolio and accelerating growth in high-yield emerging markets and embedded finance. It also adds school financing capabilities with a potential of ₹2,000 Crores in the medium term. UGRO projects ₹115 Crores in cost savings through operational efficiencies and an additional ₹150 Crores in incremental profitability, boosting return on assets by 0.6-0.7% after the merger.
Profectus, with ₹3,468 Crores in assets under management as of March 2025, operates across seven states with a network of 28 branches and over 800 employees. The company maintains a gross NPA of 1.6% and a net NPA of 1.1%. The acquisition is subject to customary conditions, including regulatory and shareholder approvals.
Shachindra Nath, founder and managing director of UGRO Capital, said the acquisition will achieve instant scale and cost savings, unlocking growth potential and strengthening the company’s secured asset mix. He added that it will accelerate UGRO’s journey to become India’s largest MSME lender through enhanced emerging markets and embedded finance capabilities.
K.V. srinivasan,executive director & CEO of Profectus Capital,said the merger would be beneficial due to the synergies and complementarity of the businesses,resulting in greater operational efficiency and profitability.
What’s next
Following the acquisition, UGRO Capital plans to leverage the combined strengths of both entities to expand its high-yield offerings while maintaining portfolio quality, driving inclusive economic growth and empowering msmes across India.