UGRO Capital Ltd completes 100% acquisition of Profectus Capital

UGRO Capital Limited (NSE: UGROCAP | BSE: 511742), a leading DataTech NBFC focused on MSME lending, today announced the completion of its 100% acquisition of Profectus Capital, marking one of the most value-accretive transactions in its journey to build India's leading MSME lending institution, strengthening scale, profitability, capital productivity, and return ratios, and positioning the company for accelerated earnings growth over the next several years.

With the addition of Profectus ₹3,468 crore AUM, UGRO's consolidated AUM rises to ₹15,471 crore, a consolidated 29% AUM expansion. The acquisition materially strengthens the company's fundamentals through an immediate ₹150 crore annualized profit accretion, achieved with zero origination cost and delivered on Day 1. The integration unlocks an additional ₹115 crore in operating synergies, expanding margins and driving a 60-70 bps improvement in ROA, thereby accelerating UGRO's path toward stronger long-term ROE. With a significant shift to a 75% secured asset mix, the combined entity benefits from greater earnings stability and lower credit-cost volatility, key drivers of sustainable valuation growth. The transaction represents highly efficient deployment of UGRO's recent equity rise into a fully secured, high-yield asset base that is accretive to capital adequacy and enhances the profitability per unit of capital deployed. In addition, Profectus established lender relationships to strengthen UGRO's liability franchise, supporting better funding costs and incremental spread improvement. The deal also opens a new ₹2,000 crore medium-term opportunity in school financing, expanding UGRO's future profit pools and further diversifying earnings. With the acquisition now complete, UGRO is poised to deliver stronger EPS growth, improved return ratios, and superior long-term value for its shareholders.

Profectus now becomes a wholly owned subsidiary of UGRO Capital effective December 8, 2025. The company will soon initiate the merger process of Profectus into the parent company, subject to Board and shareholder approvals. Both companies will continue operating independently until formal approval of the merger.

Commenting on the completion, Mr. Shachindra Nath, Founder and Managing Director of UGRO Capital said, "With the completion of this acquisition, we have strengthened the foundation for the next phase of UGRO's growth, one that is defined by stronger returns, more efficient use of capital and a sharper, more resilient earnings engine. Profectus brings a secured, high-quality book that immediately enhances our profitability profile, but more importantly, it gives us long-run compounding power through a better asset mix, deeper distribution and a more diversified lender base. This transaction is an investment in stability, scalability and value creation, and sets us firmly on the path to delivering consistently higher ROE for our shareholders."

Shares of Ugro Capital Ltd was last trading in BSE at Rs. 170.15 as compared to the previous close of Rs. 173.20. The total number of shares traded during the day was 3736 in over 69 trades.

The stock hit an intraday high of Rs. 173.55 and intraday low of 169.00. The net turnover during the day was Rs. 638918.00.

Source : Equity Bulls

Keywords

UgroCapital INE583D01011 NBFC Acquisition Completion ProfectusCapital