UGRO Capital Raises Rs 380 Crore in Long-Term Institutional Funding

UGRO Capital Secures ₹380 Crore in Institutional Funding to Boost SME Financing

The latest funding round underscores UGRO Capital’s commitment to supporting small and medium enterprises (SMEs) across India.

Strategic Alignment with Long-Term Goals

The five-year tenor of the new NCDs aligns perfectly with UGRO Capital’s focus on long-duration secured lending to small businesses, particularly in Tier-3 towns and rural areas. This funding strategy not only reflects FMO’s confidence in UGRO’s credit discipline and governance but also highlights the company’s commitment to generating measurable social impact.

Focus on Women and Youth Entrepreneurs

In line with FMO’s mandate, the proceeds from this funding will be directed towards financing women-owned and women-led SMEs, as well as youth-owned and youth-led enterprises. Additionally, the funds will support rural SMEs and contribute to financing or refinancing eligible green projects, aligning with FMO’s sustainability objectives. This targeted approach not only promotes inclusivity but also aims to foster sustainable economic growth in underserved communities.

Building a Diversified Funding Base

UGRO Capital’s recent funding round is part of a broader strategy to establish a diversified, long-tenor institutional funding base that reduces reliance on the domestic banking system. With over ₹1,300 crore raised from various development finance institutions and impact-focused investors globally, UGRO is positioning itself as a key player in the SME financing landscape. Notable investors include the Asian Development Bank (ADB), IFU (the Danish sovereign development fund), and several others, all of whom are committed to measurable social outcomes.

Implications for the SME Sector

This funding is significant for the SME sector, particularly in the context of India’s economic recovery post-pandemic. By channeling resources into women and youth-led businesses, UGRO Capital is not only addressing critical gaps in financing but also contributing to broader economic resilience. The focus on green projects further aligns with global sustainability goals, positioning UGRO as a forward-thinking institution in the financial landscape.

Key Highlights

• UGRO Capital raises ₹380 crore through NCDs fully subscribed by FMO.
• This is FMO’s third investment in UGRO Capital in three years.
• The five-year tenor aligns with UGRO’s lending strategy to SMEs.
• Funding will support women and youth-led SMEs and green projects.
• UGRO has raised over ₹1,300 crore from various global investors.

Investor Note: The successful fundraising by UGRO Capital highlights the growing confidence in the SME sector and the importance of sustainable financing. Investors should monitor how these funds are deployed and the impact on the targeted demographics, as well as the overall performance of UGRO Capital in the evolving market landscape.