U GRO Capital Limited is a non-deposit taking systemically important NBFC registered with the RBI. Its equity share is listed on NSE & BSE. This company is a technology-focused, small business lending platform, focusing on providing customised loan solutions with a data-centric, technology-enabled approach. U GRO Capital offers MSMEs a diverse range of product offerings like term loan (secured and unsecured), supply chain financing, machinery loan, and short-term financing through its multiple FinTech and NBFC partners. Moreover, the company does co-lending with FinTech and smaller NBFC partners to expand its reach and lend to the micro-enterprises.
U GRO Capital is an institutional managed company with major shareholders being ADV Partners, New Quest Capital, SAMENA Capital.
Credit Rating-U GRO Capital has been rated as A- by CRISIL and A by India Ratings.
Rating downgrade- In December 2022, Acuite Rating and Research Ltd has downgraded credit rating of UGRO Capital to A from A+
Reasons of rating downgrade-
⮚ Weaker than expected earning performance as its return on AUM stood low at 0.8% during H1FY23
⮚ High operating costs at 63% of U GRO Capital’s total income
⮚ Impact on profitability due to high provisioning
Financials-
|
Parameters (Rs billion) |
Q3FY23 |
Q2FY23 |
Q3FY22 |
|
Interest Income |
133 |
115.7 |
73.4 |
|
PAT |
13.1 |
5.3 |
3.4 |
|
Net worth |
9.69 |
9.54 |
9.38 |
|
AUM |
50.95 |
43.75 |
25.89 |
|
PAT/AUM |
1.60% |
0.70% |
0.60% |
|
GNPA |
1.70% |
1.70% |
2.40% |
|
NNPA |
1.10% |
1.20% |
2.20% |
|
CRAR |
21.45% |
24.66% |
36.15% |
|
Gearing ratio |
3 |
2.9 |
1.84 |
Yearly basis
|
Parameters (Rs billion) |
FY21 |
FY22 |
|
Interest Income |
1.47 |
2.72 |
|
PAT |
0.29 |
0.14 |
|
Net worth |
9.52 |
9.67 |
|
AUM |
13.17 |
29.69 |
|
GNPA |
2.79 |
2.28 |
|
NNPA |
1.75 |
1.7 |
|
CRAR |
65.55 |
34.37 |
|
Gearing ratio |
|
1.86 |
Credit Positive
⮚ Adequate Capitalization
⮚ Diversified product offering using technology
⮚ Comfortable asset quality
Credit Negative
⮚ Weak operating performance
⮚ High operating cost
⮚ High borrowing cost for fund mobilisation
⮚ Rise in gearing