U GRO Capital, a BSE listed, technology enabled small business lending platform has within 10 months from starting operations successfully raised capital by way of securitization and issuance of NCDs.
U GRO Capital inked its first securitization transaction of around INR 25 crores with Poonawalla Finance Pvt. Ltd. on 1st Oct and followed it up by issuing its first NCD totalling of around INR 50 crores subscribed to by Sachin Bansal in his private capacity. The PTCs were assigned a rating of A- by Acuité and consists of loans given out predominantly for small businesses and originated by U GRO Capital over the last few months.
The NCD issuance and the securitization deal, are unique for a company at an early stage in its journey, especially in the current market conditions and underlines the high standards of corporate governance being adhered to at U GRO Capital. Further, it is a stamp of approval to the natively built underwriting platform and technology framework that U GRO Capital has developed since its inception.
U GRO, founded by financial services veteran Mr. Shachindra Nath, in December 2017, had earlier raised approximately USS 140 Mn from a diversified set of global private equity investors such as Neruest, ADV Partners, PAG and Samena Capital and public market investors such as Abakkus, PNB Metlife and multiple Indian family offices.
The company started disbursals in January 2019 and has, in a short span of close to 10 months, disbursed more than INR 600 Crores to 6,000+ small businesses across India. U GRO focuses on 8 sectors and 38 sub-sectors and is solving the burgeoning need of credit by use of highly specialized sectoral statistical scorecards, deep sub-sectoral underwriting algorithms and a highly integrated technology platform which delivers an in-principal credit approval within 60 minutes.
The company has adopted a three-pronged liability strategy which combines balance sheet lending with an off-balance sheet model including assignments/securitization and co-origination partnerships with larger NBFCs/banks to create a truly hybrid lending model. "In the long run, we believe this model will help us boost our return on equity by bringing in a steady pool of fee income while also helping us cater to customers at different risk profiles and price points", said Mr. Shachindra Nath, Executive Chairman of U GRO Capital.
Mr. Shachindra Nath, Executive Chairman of U GRO said "While we continue to have strong equity in our business and sufficient liquidity, we want to establish our ability to raise different forms of liability from diverse sources. We would like all stakeholders to gradually draw comfort with our high degree of governance, quality of underwriting and depth of our specialised underwriting. These transactions demonstrate our ability to securitise our book at an early stage of our development and establish that besides conventional term-financing we have ability to raise resources from alternative channels as well. We are delighted to partner with such well-known names and hope that this would be the building blocks of a strong liability franchise".
Shares of Ugro Capital Ltd was last trading in BSE at Rs.187.75 as compared to the previous close of Rs. 180. The total number of shares traded during the day was 3285 in over 36 trades.
The stock hit an intraday high of Rs. 187.9 and intraday low of 184. The net turnover during the day was Rs. 609698.