[Funding] FinTech U GRO Capital raises Rs 400 crores from banks and debt instruments

NBFC U GRO Capital has raised about Rs 400 crore from banks and through other debt instruments. The company expects to gather momentum in the business as the Government is lifting the lockdown in many parts of India. Businesses are back to normal and the company aims to increase credit lending in the upcoming quarter.

According to the company statement, its AUM at the end of June 30, 2020, stood at INR 847.4 crores across 7,343 customers. Of the total loan book, 69% of it stands secure. Sectors including Education, Light Engineering and Electrical Equipment & Components constitute 54% of the total loan book whereas geographical concentration at a state-level is at a maximum of 21%.

Commenting on the results, Mr Shachindra Nath, Executive Chairman and Managing Director of U GRO Capital stated,

“Stepping into 2020, businesses were already facing the brunt of economic slowdown, when the pandemic arose to exacerbate the pain. For us, the circumstances called for a degree of improvisation in the form of digitalization. This will enable us to operate effectively in these unprecedented times. Having done so, our disbursals across all U GRO locations have gained ground amid the lockdown scenario, with our July disbursal figures reaching approximately 80% of pre-COVID levels."

He further added, "With the economy gradually opening, Indian small businesses have started taking small steps towards regaining their operational potential. They are thus looking for liquidity infusions, as reflected in our success with Sanjeevani program and ECLGS. Towards strengthening our funding base, we managed to raise liability of over Rs. 150 crores from diverse sources, including under government schemes. We have a strong pipeline in place to cater to our future liability needs also. I believe that the worst is now behind us in the lending sector. The well-run firms will enjoy the opportunity to build their market share in the coming months.”

Earlier in May, U GRO Capital has entered a partnership with Global Value Creation Partners (GVCP). This partnership will enable the former’s growth as a leading impact financing company for small businesses. As part of the partnership, GVCP has placed two global experts — Vincent Polizatto and William Haworth — as advisors to U GRO. These two experts will provide support in the areas of strategy, corporate and risk governance, and overall institutional development. According to GVCP, its engagement will help U GRO accelerate its development as an environmental, social, and governance lender. It will also foster domestic and global partnerships with the impact community.