Ugro Capital Ltd

Overview

• Amalgamation between the Transferor and Transferee under the Companies Act, 2013.
• Sanctioned by a Mumbai Bench NCLT order dated 6 August 2026.

Rationale

• No explicit business rationale disclosed; consolidation per sanctioned order.

Key Terms

• Nature: Amalgamation of Transferor with Transferee.
• Appointed/effective date: Not disclosed; linked to NCLT order.
• Related-party/arm's-length status: Not specified.
• Approvals: NCLT sanction; separate equity shareholder and creditor meetings.

Financial Impact

• Exchange ratio/consideration: Not disclosed.
• Pre- and post-scheme capital structure: Not disclosed.

Stakeholder Impact

• Shareholders and creditors to vote through separate meetings.
• No employee-specific or operational impact disclosed.
• Listing status impact not specified.

Status & Next Steps

• NCLT order dated 6 August 2026 sanctioned the amalgamation.
• Meetings for shareholders and creditors scheduled for 22 September 2026.
• Web notice and explanatory statements accessible on company and exchange sites.

Overview

• Consolidation via amalgamation of the transferor into the transferee.
• Transferor is wholly owned by the transferee; no cash consideration.

Rationale

• Intended consolidation to strengthen asset mix with secured assets.
• Aims to achieve operational synergies and long-term growth.

Key Terms

• Appointed date fixed at opening of business 01.04.2026.
• No new shares issued; transferor’s shares cancelled.
• Transferor is a related party; intra-group transaction not at arm's length.
• NCLT order dated 06.08.2026 directs meetings within 90 days.
• RBI approval received; NSE/BSE observations no adverse observations.

Financial Impact

• No consideration; post-amalgamation equity pattern remains unchanged.
• Post-scheme transferee equity capital: 1,54,70,67,530 shares.
• Transferor’s entire share capital to be cancelled.

Stakeholders

• Shareholders of transferor see cancellation of their shares; transferee remains unchanged.
• Creditors’ rights unaffected; meetings to consider the scheme; payments in ordinary course.

Status & Next Steps

• NCLT order directs meetings within 90 days; meetings via VC/OAVM.
• Scheme subject to regulatory approvals; stock exchanges to be informed.
• Chairperson remuneration Rs 1,50,000; Scrutinizer remuneration Rs 75,000.

Financial Performance

• Total income INR 535 crores; up 27% YoY.
• Interest income INR 363 crores; +19% YoY, -13% QoQ.
• Co-lending/direct assignment INR 75 crores; down from 155 crores in Q4.
• Co-lending share now 14% of total income.
• Debt INR 10,793 crores; borrowing cost 10.14%; 66% borrowings >3 years.
• Credit cost INR 66 crores; 1.7% of average AUM.
• GNPA on AUM 2.6%; Net NPA 1.9%.
• Pre-tax ROA 2.6%; ROA on PAT basis 2.8% (one-time reversal).
• Liquidity INR 1,864 crores; Net worth INR 2,976 crores.
• Leverage 3.6x; standalone capital adequacy 21%.

Growth Engines and Segments

• Q1'FY27 total AUM 15,013 crores; net disbursements 2,551 crores; +59% YoY.
• Emerging Market LAP + GROx AUM 6,899 crores; 46% of total AUM.
• LAP AUM 3,896 crores; QoQ +9%; disbursed 592 crores.
• Portfolio yield 18.5%; GNPA 2.1%.
• GROx AUM 3,003 crores; +32% QoQ; disbursed 1,853 crores; 60,000+ loans/month; 3.4 lakh customers.
• GROx yield 26%; GNPA 2.1%.
• Productivity per branch INR 62 lakhs/month; mature branches 96; 145 branches <6 months.
• Total branches 317; progression toward productivity milestones.

Balance Sheet and Liquidity

• Merger with Profectus Capital awaiting NCLT approval; non-cash net-worth adjustment possible.
• Standalone capital adequacy 21%; merged basis 23–24%.
• One-time deferred tax adjustment due to regime migration; focus on PBT and pre-tax ROA.
• Liquidity position ~INR 1,864 crores.
• Net worth INR 2,976 crores; leverage 3.6x.

Operations and Milestones

• July 2026: monthly disbursement crosses INR 1,000 crores.
• Strategic realignment announced February 7, 2026; two engines prioritized.
• GROx integrates UGRO data analytics and underwriting platform.
• Cost base reset; opex reduction target INR 220 crores annually.

Guidance and Merger Update

• FY27 AUM expected to remain flat; FY28 growth from engines about 25% CAGR.
• Defocused portfolio to run down ~20%; actual pace around 25% run-down observed.
• FY29 AUM growth from Emerging Market + GROx; ~85% of AUM from these two engines.
• Merger expected by Feb; if delayed, by end of Q4; merged CET1/overall capital adequacy ~23–24%.
• Dividend policy under review; buyback not permitted for NBFCs; capital preservation prioritized.

Q&A Highlights

• Q: AUM guidance for FY27/28; management: FY27 flat; FY28 growth from engines.
• Q: ROA trajectory; current ~2.1–2.6%; path to 3–3.5% over time.
• Q: LAP GNPA peak around 3–4%; credit cost ~1% of average AUM.
• Q: DSA exit not planned; reasons include vintage and collection infra.
• Q: Merger and capital adequacy; merged basis 23–24%; room for AUM growth.
• Q: Dividend/buyback considerations; NBFC regulatory constraints; policy changes may be needed.

Risks and Watchpoints

• Run-off pace could increase income reversals on off-balance sheet book.
• Execution risk in productivity inflection across younger branches.
• Funding cost trajectory and access to long-term funding.
• Regulatory risk around dividend policy and merger approvals.

Overview

• Type: Amalgamation of Transferor into Transferee.
• Transferor is a wholly owned subsidiary of the Transferee.

Purpose & Rationale

• Consolidates businesses to realize synergies and scale.

Key Terms & Structure

• Nature: Amalgamation; Appointed Date: 01.04.2026.
• Related party: Transferor wholly owned by Transferee; no consideration.
• Approvals: NCLT order; RBI approval; stock exchanges no objection.
• Meetings: VC/OAVM convened for all shareholders and creditors within 90 days.

Financial Impact

• Consideration: none; Transferor's shares cancelled on effectiveness.
• Post-scheme equity: no change in Transferee's shareholding.
• NCDs: Transferor debenture holders become transferee debenture holders on same terms.

Stakeholder Impact

• Shareholders: consolidated entity; no dilution for transferee; transferor shareholders absorbed.
• Creditors: rights preserved; meetings to approve scheme; no immediate changes.
• Employees: expected integration benefits; no explicit terms disclosed.

Status & Next Steps

• Status: NCLT order issued directing meetings.
• Next steps: hold VC/OAVM meetings and seek approvals.
• Subject to regulatory clearances and other approvals.

Scheme overview

• Amalgamation between transferor and transferee, filed with the NCLT Mumbai.
• Filing date with NCLT: 16 July 2026; no appointed or effective date disclosed.
• Approvals required include shareholder and creditor approvals, plus NCLT sanction and other regulatory clearances.
• No share exchange ratio or consideration disclosed; no stated changes to capital structure.
• Status: Scheme filing awaiting approvals; subject to regulatory and shareholder consent.

Meeting Details

• Date: 04 August 2026; Time: not disclosed; Location: not disclosed.

Key Agenda Items

• Consider unaudited standalone and consolidated results for quarter ended 30 June 2026, with Limited Review Report.
• Any other items with permission of the Chair.

Other Notes