UGRO Capital has announced the acquisition of Profectus Capital in a ₹1,400 crore all-cash transaction, marking a significant step in its expansion strategy within the MSME lending space. The company stated that the deal will be funded through a mix of recent capital raise (₹950 crore) and internal accruals or other alternative sources (₹450 crore). With this, Profectus will become a wholly owned subsidiary of UGRO.
The acquisition is expected to bring immediate benefits, including a 29% jump in Assets Under Management (AUM), addition of ₹150 crore in annualized profit, and cost synergies of ₹115 crore, ultimately boosting UGRO’s Return on Assets (ROA) by 60–70 basis points. The consolidated entity’s AUM will stand at ₹15,471 crore.
Profectus, with an AUM of ₹3,468 crore as of March 2025, operates in seven states through a 28-branch network and has maintained a gross NPA of 1.6%. UGRO will gain access to this secured asset portfolio and a complementary lender base, further diversifying its offerings with school finance and embedded finance potential worth ₹2,000 crore.
UGRO shares closed at ₹2,303.15 on Monday, up 0.82%. The stock may see heightened interest in the next session given the scale and earnings accretive nature of this deal.
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