Non-Banking Finance Company (NBFC) UGRO Capital involved in BSE Smallcap has announced to purchase a 100 % stake in Profactus Capital. This is a full cash deal of ₹ 1,400 crore. The deal has been made under the share purchase agreement (SPA) of two global private equity investors of Actis Group- ACTIS PC Investment and Actis PC (Mauritius).
According to the company, this acquisition will be valuable from day one and through this, Ugro Capital will get an opportunity to strengthen its presence in the MSME LNDING segment. The Profactus currently works with a network of 28 branches and more than 800 employees in seven states with an asset under management (AUM) of ₹ 3,468 crore.
The deal is done on which valuation
This transaction has been done at 1.07 times valuation on the estimated FY26 net worth of Profactus. UGRO reported that funding for this acquisition will be done with recently gathered equity capital and internal resources.
Possibility of growth from entry in new segment
The deal will provide an entry in new sectors such as embedded finance and school financeing, which were untouched for the company so far. The company hopes that the deal will give it an opportunity for additional loan growth of up to ₹ 2,000 crore.
UGRO will become a fully owned subsidiary of UGRO under the Profactus Capital Deal. However, both companies will continue to function independently until the shareholders and RBI approval is received.
Operational efficiency and ROA will improve
UGRO is expected to achieve operational efficiency of up to ₹ 115 crore annually through this acquisition. Also, net profit can also increase by ₹ 150 crore. According to sources, this can reach 3.5% in the company’s return on assets (ROA) FY26 and 4.5% in FY27, which will be about 0.6–0.7 percent more points so far.
UGRO is already cooking with 17 banks and NBFCs, and 42% of its total AUM comes from off-balance sheet assets.
1% msme market share target
UGRO has so far collected more than ₹ 2,500 crore equity funding since 2018 and now its goal is to achieve 1% share in India’s MSME loan market. Under the capital arrangement of the deal, the UGRO is also going to bring a proposal to add “acquisition” to the existing convertible debentures (CCDs) objects by taking approval from the board and shareholders.
Ugro Capital shares closed at Rs 169.90 on Tuesday (June 17) with a decline of 1.91% on NSE. The stock has declined by 35.79% during the last one year.
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