UGRO Capital gets RBI approval to acquire Profectus Capital in Rs 1,400 crore deal

UGRO Capital Limited, a DataTech non-banking finance company (NBFC) focused on lending to micro, small and medium enterprises (MSMEs), has secured approval from the Reserve Bank of India (RBI) to acquire Profectus Capital Private Limited.

Advertisment

The Rs 1,400 crore all-cash deal, announced on June 17, 2025, is expected to close by October 31, 2025, subject to customary closing conditions.

Once completed, Profectus will become a subsidiary of UGRO Capital, and the company plans to immediately file for a merger with effect from April 1, 2025.

The acquisition is set to increase UGRO’s assets under management (AUM) by 29%, strengthen its secured asset mix, and expand its portfolio into high-yield segments such as emerging markets and embedded finance. It also opens a Rs 2,000 crore opportunity in school financing, while deepening exposure to secured loan against property (LAP), machinery finance, and supply chain finance.

The company estimates annual cost savings of Rs 115 crore and incremental profitability of Rs 150 crore from the merger, boosting return on assets (ROA) by 0.6–0.7%. The combined entity will manage more than Rs 15,000 crore in AUM, serving over 2 lakh MSMEs nationwide.

Shachindra Nath, Founder and Managing Director, UGRO Capital, said, “The RBI’s approval is a critical milestone that validates our strategy and accelerates our mission of solving India’s small business credit gap. Profectus’ complementary portfolio, combined with UGRO’s DataTech underwriting capabilities, will enable stronger profitability, higher secured lending, and inclusive growth across the MSME ecosystem.”

UGRO has been building a tech-enabled lending model backed by data analytics, AI-based credit scoring, and co-lending partnerships with 17 banks and NBFCs. The company has raised more than Rs 2,800 crore in equity since 2018, with its latest raise in 2025 partly funding the acquisition.