U GRO Capital, a non-banking financial company (NBFC) specializing in lending to Micro, Small, and Medium Enterprises (MSMEs), has successfully raised INR 250 Cr (approximately $30 Mn) through non-convertible debentures (NCDs) from the Dutch entrepreneurial development bank, FMO. The issuance of INR-denominated NCDs was fully subscribed by FMO, further strengthening the financial position of U GRO Capital.
Founded in 2018 by Shachindra Nath and listed on both the NSE and the BSE, U GRO Capital has emerged as a significant player in the NBFC sector. The company prides itself on extending credit to more than 80,000 small businesses over the last five years. Approximately 20% of U GRO Capital’s total borrowings are strategically sourced from development financial institutions (DFIs) and impact funds, both domestically and internationally. Key contributors include ResponsAbility, Calvert Impact Capital, Enabling Qapital, and SIDBI.
Shachindra Nath, Founder and Managing Director of U GRO Capital, commented on the latest fundraise, stating, “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.”
This debt funding comes on the heels of U GRO Capital’s earlier successful fundraising efforts, including the INR 340 Cr ($41.3 Mn) raised from IFU, the Denmark government’s development financial institution, and long-term shareholders.
U GRO Capital’s financial performance remains robust, with a reported profit after tax of INR 28.9 Cr in the second quarter of the financial year 2023-24 (FY24). This represents a notable 14% growth over the INR 25.2 Cr profit reported in the previous quarter.
In the Indian financial landscape, U GRO Capital faces competition from other fintech startups such as Indifi and Lendingkart, as well as traditional banks and NBFCs. The ongoing support and investment from global DFIs underscore the confidence in U GRO Capital’s mission to empower MSMEs through financial inclusion.
In India, where the fintech market is poised to become a $1.3 Tn market opportunity by 2025, the lendingtech subsector alone is expected to account for $616 Bn.
