• The company is an NBFC focusing on MSME lending to the select segments.
• It posted growth in its top and bottom lines for the FY24 and FY25.
• The company is operating in a highly competitive and fragmented segment.
• Based on its financial data and the stock market data, the issue appears fully priced discounting all near term positives.
• Well-informed/cash surplus investors may park moderate funds for long term.
PREFACE:
The company is coming out with its RI to mobilize Rs. 400.00 cr., and is opening for subscription on June 13, 2025, and its offer document is dated June 04, 2025, with a record date of June 05, 2025, but the offer document was uploaded on the designated exchange only on June 10, 2025. Thus, delayed submission of offer documents for RI is unabatedly going on.
ABOUT COMPANY:
Ugro Capital Ltd. (UCL)originally incorporated as Chokhani Securities Pvt. Ltd., is a data-tech empowering small business lending institution primarily engaged in the business of lending to MSME sector. Company’s sector focus approach on light engineering, food processing, auto components, hospitality, healthcare, chemicals, education, electrical equipment & components and emerging market segments & nature of the underlying MSMEs helps create impact at multiple levels.
The Company is also registered with Reserve Bank of India as a non-deposit accepting NBFC classified as NBFC- Middle Layer with registration no. 13.00325 dated October 26, 2018. Reserve Bank of India has issued a certificate of registration dated January 09, 2024 bearing no. N-13.02475 to it, to commence/carry on the factoring business without accepting public deposits.
The MSME sector is underpenetrated by NBFCs and there is a huge unmet credit demand in the sector, primarily due to lack of documentation and credit history required to access to financing from formal banking channels. There is also a significant gap between the original credit requirement and the actual credit exposure of formal channels to MSMEs, which provides a huge opportunity in MSME lending. UCL provides comprehensive MSME lending solutions through its technology platforms, that include secured business loan, business loan, emerging market loan, machinery loan, and embedded finance. As of March 31, 2025, it had 2149 employees on its payroll.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 24651744 equity shares of Rs. 10 each at a fixed price of Rs. 162 per share to mobilize Rs. 400.00 cr. (approx.). The RI is opening for subscription on June 13, 2025, and will close on June 24, 2025. The company is offering RI in the ratio of 50 for 189 to its eligible stakeholders as of the record date of June 05, 2025. The company is asking for full money on application for number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 12.05 cr. for this RI process, and from the net proceeds, it will utilize Rs. 360.00 cr. for augmenting the capital base for funding requirement, and Rs. 27.95 cr. for general corporate purposes.
The RI is self-managed by the company itself, and MUFG Intime India Pvt. Ltd. is the registrar to the issue. InCred Capital Wealth Portfolio Managers Pvt. Ltd. is advisor to the company for this RI.
Post RI, company’s current paid-up equity capital of Rs. 93.18 cr. will stand enhanced to Rs. 117.84 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 1908.93 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, it has posted a total revenue/ net profit of Rs. 1081.68 cr. / Rs. 119.35 cr. (FY24), Rs. 1441.85 cr. / Rs. 143.93 cr. (FY25). Its paid-up equity capital of Rs. 91.95 cr. is supported by free reserves of Rs.1954.44 cr. as of March 31, 2025, and its NAV stands at Rs. 222.57.
DIVIDEND POLICY:
The offer document is silent on its dividend policy. The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 511742 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 179.20 on June 04, 2025, and opened on an ex-right basis at 175.10 on June 05, 2025. Since then, it has marked a high/low of Rs. 184.70 / Rs. 170.70. The scrip last closed at Rs. 179.30 as of June 11, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 294.00 / Rs. 144.11.
The promoters’ holding has been constant around 2.23% for the last three quarters ended with March 31, 2025. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on June 12, 2025
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
