UGRO Capital To Acquire Profectus Capital In Rs 1,400 Crore All-Cash Deal
UGRO estimates the acquisition will add approximately Rs 150 crore of annualised profit, making it a capital adequacy accretive transaction.
UGRO Capital Ltd. on Tuesday announced it will acquire SME lending company Profectus Capital Pvt. for Rs 1,400 crore payable in a single tranche.
The company executed the share purchase agreement with Actis PC Investment (Mauritius) Ltd., Actis PC (Mauritius) Ltd., and Profectus Capital, according to a stock exchange filing. Actis is a US private equity firm owned by General Atlantic.
The acquisition is expected to be completed within two to three months, subject to customary approvals from the RBI and shareholders.
The deal will be funded from the proceeds of a preferential issue of compulsory convertible debentures, to be considered by the UGRO Capital board on June 20.
Profectus has assets under management worth Rs 3,468 crore as of March 2025 with a presence across seven states. The firm is registered with the RBI as a NBFC-Middle Layer.
UGRO estimates the acquisition will add approximately Rs 150 crore of annualised profit, making it a capital adequacy accretive transaction.
Following the acquisition, UGRO plans to merge Profectus. The effective date of the merger post-acquisition would be April 1, 2025.
Daiwa Corporate Advisory India Pvt. and Avendus Capital Pvt. advised on the deal.
Purpose Of The Acquisition
In an investor presentation, UGRO said the combined gross AUM after the Profectus deal will rise by 29% to Rs 15,471 crore. The combined portfolio will be well-diversified, enabling accelerated growth in focus areas such as emerging markets and embedded finance, it said.
"The acquisition strategically enhances four core NBFC pillars: Immediate 29% AUM growth diversifies the combined portfolio to accelerate high-yield Emerging Markets and Embedded Finance expansion, while adding School Financing with incremental Rs 2,000 crore medium-term potential, as per our assessment," UGRO Capital said in a press release.
Cost synergies will drive higher profitability, accelerating net worth growth, it said.
Shares of UGRO Capital settled 1.1% lower at Rs 171.3 apiece on the BSE, ahead of the announcement, compared to a 0.26% decline in the benchmark Sensex.
