The shares of this prominent DataTech NBFC lending platform surged 11% to ₹314.85 per share on Friday, a day after the company’s board approved fundraising of ₹1,332 crores.
At 11:15 a.m., Ugro Capital Ltd shares were trading at ₹288.75 a share on the National Stock Exchange, up 1.83 percent, and the company has a market capitalization of ₹2,680 crores.
UGRO Capital Ltd’s Board of Directors approved raising funds totaling ₹1,332 crore through the issuance of compulsory convertible debentures (CCDs) and warrants, both with a face value of ₹10, from both existing and new institutional investors, as well as Marquee Family Offices.
The company stated in an exchange filing that this equity fundraising is contingent upon shareholder approval. Furthermore, the founder, board members, and management team of the DataTech NBFC have pledged ₹16.25 crore in warrants.
The fundraising initiative has garnered interest from Samena Capital, an existing private equity investor, which has committed ₹ 500 crore through warrants. Additionally, institutional investors such as Aregence and various marquee family offices have committed to subscribing to compulsory convertible debentures and warrants, as per the company’s exchange filing.
Furthermore, the board has approved the acquisition of the financial services platform, MyShubhLife, for ₹45 crore in a combined cash and equity transaction. According to the filing, the acquisition will involve a distribution of 64% equity and 36% cash.
Ugro Capital Ltd is engaged in the business of lending and mainly deals in financing small and medium enterprise clients with a focus on Healthcare, Education, Chemicals, Food Processing/FMCG, Hospitality, Electrical Equipment and Components, Auto Components, and Light Engineering segments.
In the last month, Ugro Capital Ltd shares have surged by 17%, while over the past year, they have seen a more significant increase of 53%.
In terms of financial performance, the company witnessed a remarkable 54% year-on-year surge in revenue, climbing from ₹209 crore in Q4FY23 to ₹322 crore in Q4FY24. However, net profit saw a substantial 136% increase from ₹14 crore to ₹33 crore.
As of March 2024, the Assets Under Management (AUM) rose to ₹9,047 crores from ₹8,364 crores in December 2023 (an 8% increase) and from ₹6,081 crores in March 2023 (a 49% increase). Additionally, the company’s net loans originated increased to ₹1,554 crores in Q4’FY24 from ₹1,552 crores in Q3’FY24 and ₹ 1,459 crores in Q4’FY23.
In the broader breakdown of assets under management (AUM), the largest portions consist of Secured Business Loans (23%), Business Loans (23%), Micro Enterprise Loans (13%), Supply Chain Financing (7%), and Machinery Loans (13%).
In terms of recent shareholding patterns, the company’s promoters hold a 2.23% stake, Foreign Institutional Investors hold 19.76%, and retail investors hold 72.91%.
Written by Omkar Chitnis
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