Ugro Capital Ltd Share Price – NSE  /  BSE

Finance, Small Cap

Ugro Capital has allotted 50,050 equity shares under ESOP on 23 November 2023. In view of this the paid-up share capital of the Company stands increased from Rs. 92,49,84,820/- divided into 9,24,98,482 equity shares of face value Rs. 10/- each to Rs. 92,54,85,320/- divided into 9,25,48,532 equity shares face value of Rs.10/- each.

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The Reserve Bank of India (RBI) introduced new regulations on 16 November 2023 to tighten oversight of unsecured personal loans in the banking and non-banking financial sectors. These regulations involve a significant increase in risk weights for consumer credit exposure of commercial banks, including existing and new personal loans, by 25% to 125%. The changes do not apply to housing loans, education loans, vehicle loans, and loans secured by gold and gold jewelry.

Further, the RBI has also raised the risk weights on credit card receivables by 25% to 150% for scheduled commercial banks (SCBs) and to 125% for NBFCs. These regulations are immediately applicable to both new and outstanding loans. The amendments align with previous statements from RBI Governor Shaktikanta Das, who highlighted the rapid growth of specific consumer credit segments and stressed the importance of enhancing internal surveillance mechanisms within banks and NBFCs to address risk accumulation and ensure financial stability.

In response to this circular, UGRO Capital clarified that as of 30 September 2023, its debt equity ratio was 2.8x and its capital adequacy was 24.8%. The company caters to Micro, Small, and Medium Enterprises (MSMEs) with Udyam registrations, offering secured and unsecured loans with a 100% Priority Sector Lending (PSL) loan book.

For consumer and personal loans, UGRO believes there will be no additional risk weight on its portfolio due to their customer base and PSL loan book. Similarly, it does not anticipate a significant impact on liquidity or borrowing costs for bank credit to NBFCs, as its asset under management qualifies for PSL classification.

UGRO also emphasized its co-lending partnerships with a variety of banks and the fact that approximately 45% of its asset under management is handled off-balance sheet. With these factors in mind and their focus on priority sector-led MSME, it does not foresee any immediate or foreseeable impact on their growth trajectory or profitability due to the increased risk weights for bank lending to NBFCs.

UGRO Capital is a data tech lending platform focusing on addressing the small business credit gap in India through its extensive distribution reach and data-tech approach. The company's data analytics and robust technology architecture enable customized sourcing platforms for each channel. It offers various platforms like GRO Plus, GRO Chain, GRO Xstream, and GRO X application, providing supply chain financing, co-lending, integration with fintechs, and embedded financing options to MSMEs.

Net profit of Ugro Capital rose 448.20% to Rs 28.89 crore while total income jumped 63.3% to Rs 253.63 crore in Q2 September 2023 over Q2 September 2022.

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Ugro Capital has allotted 3,000 Listed, Rated, Senior, Secured, Taxable, Redeemable, Non-Convertible Debentures (NCDs) having face value of Rs 1,00,000 each aggregating Rs 30 crore through private placement.

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UGRO Capital will hold a meeting of the Board of Directors of the Company on 4 November 2023.

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