Ugro Capital Limited has informed the Exchange regarding a press release dated June 17, 2025, titled "UGRO CAPITAL TO ACQUIRE PROFECTUS CAPITAL IN A Rs. 1,400 CR ALL-CASH DEAL".
UGROCAP · price
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Ugro Capital has signed a Share Purchase Agreement with Actis LLP to acquire 100% of Profectus Capital for Rs 1,400 Crore in an all-cash deal. Profectus is an MSME-focused NBFC with Rs 3,468 Crore AUM, Rs 27 Crore PAT, 0.9% ROA, 28 branches across 7 states, and a strong asset quality (Gross NPA 1.6%, Net NPA 1.1%). The combined entity will have Rs 15,471 Crore AUM (29% immediate growth), 263 branches, and a 75:25 secured-to-unsecured mix. Ugro expects Rs 115 Crore cost savings, Rs 150 Crore incremental annualized profit, and a 0.6-0.7% boost in ROA. Funding will come from Rs 950 Crore of recently raised capital and Rs 450 Crore of internal accruals/alternatives. The deal adds School Financing with Rs 2,000 Crore medium-term potential and is expected to close in 2-3 months, subject to RBI and shareholder approvals, with a merger planned thereafter.
This is a sizeable, capital-accretive acquisition that immediately scales Ugro's AUM by 29%, improves secured asset mix, and adds a new high-growth vertical (school financing). Shareholders could see stronger combined profitability and ROA, but the company is deploying freshly raised equity into this deal and may seek fresh approvals to expand the use of proceeds from its ongoing preferential CCD issuance, which could lead to further dilution. Short-term stock reaction may hinge on the perceived valuation (1.07x projected FY26 net worth) and integration risk.