NBFC firm UGRO Capital Ltd on Tuesday proposed to acquire Profectus Capital Pvt Ltd for a cash consideration of Rs 1,400 crore in a bid to expand its MSME loan business.
UGRO Capital has executed a Share Purchase Agreement with the existing shareholders of Profectus Capital Pvt Ltd to acquire 100 per cent of the shares, the non-banking financial company said in a statement.
This all-cash deal, with the consideration payable in a single tranche at closing, will mobilise proceeds from UGRO's recently announced equity raise, will deploy capital into a fully secured asset portfolio delivering instant scale benefits with zero origination costs, making Profectus a wholly owned subsidiary, it said.
This acquisition would add approximately Rs 150 crore of annualised profit to UGRO, making it a capital adequacy accretive transaction, it said.
"We estimate significant geographic and product alignment in Secured LAP, Machinery Finance, and Supply Chain Finance which we believe will drive operational efficiencies, generating Rs 115 crore cost savings and adding incremental profitability of Rs 150 crore thus boosting ROA (Return on Assets) by 0.6-0.7 per cent once a post-acquisition merger is complete," it said.
The combined entity's strengthened asset mix features higher secured assets, thereby providing further impetus to scale emerging market and embedded finance businesses.
Profectus has demonstrated stable portfolio expansion, building its assets under management to Rs 3,468 crore as of March 2025, with a presence across seven states through a 28-branch network and over 800-member team, all while maintaining a gross NPA (non-performing asset) of 1.6 per cent and Net NPA of 1.1 per cent.
