Ugro Capital Limited — Credit Ratings, 01-07-2025: Credit Rating

Acuite has reaffirmed UGRO Capital Limited’s long-term rating at ‘ACUITE A’ on Rs. 156.28 Cr. non-convertible debentures but placed it on Rating Watch with Developing Implications, reflecting uncertainty due to UGRO’s proposed acquisition of Profectus Capital for about Rs. 1400 Cr. This deal, pending regulatory and shareholder approvals, is expected to increase UGRO’s AUM by 29% to ~Rs. 15,400 Cr and enhance product diversification. The reaffirmation factors in strong business growth, increasing portfolio to Rs. 12,003 Cr, a robust management team supported by marquee investors, and moderate gearing at 3.37 times. However, weak earnings with a RoAA of 1.86%, moderate asset quality (GNPA at 2.35%), and the cost of borrowing at 10.61% remain concerns. The rating watch will be resolved once the acquisition’s impact on UGRO’s financials and business profile is clearer.