UGRO Capital Limited is a non-deposit taking systemically important NBFC registered with the RBI and the equity shares of the Company are listed on NSE and BSE. They have been categorized as an ‘Middle Layer’ NBFC under the scale based regulatory framework for NBFCs introduced by the RBI, with effect from September 30, 2022 and updated vide Scale Based Regulation. They are currently engaged in the business of lending and primarily deals in financing SME and MSME sector with focus on Healthcare, Education, Chemicals, Food Processing/FMCG, Hospitality, Electrical Equipment & Components, Auto Components and Light Engineering segments and Micro Enterprises segments. They offer the following loan products and solutions to MSME through our technology platforms: •Prime Secured Loans; •Prime Unsecured Loans; •Micro Enterprise Loans; •Machinery Loans; •Supply Chain Finance; •Partnerships and Alliances. The Company’s mission is “To Solve the Unsolved”. The Company has a dedicated programme for secured and unsecured loans aimed at MSMEs and has partnered with large OEMs to provide an end-to-end solution. They also lend to customers in the prime segment to the micro enterprises. While they have maintained a keen focus on the initial prime/near-prime target segment, they have also worked towards addressing a broader demographic as per the efforts to solve India’s MSME credit gap. Further, the entry into factoring business will help the Company to leverage the reach and expertise to MSME sector with an institutionalised and secured approach. They serve a diverse set of customers. Presently, the branches are divided into two segments i.e., prime branch having base in metro, tier 1 and tier 2 cities with customer turnover of Rs 1 crore to Rs 15 crore and micro branch having base in tier 3 to 6 cities having customer turnover of less than Rs 1 crore. Of the said AUM, approximately 73% is in the form of secured/ quasi-secured lending. The AUM has grown from Rs 1,31,687.51 lakh as at March 31, 2021 and Rs 2,96,980.01 lakh as at March 31, 2022 to Rs 6,08,070.69 lakh as at March 31, 2023. As of December 31, 2023, the AUM is at Rs 8,36,376.40 lakh. Across the offered products, as on December 31, 2023, the average ticket size stood at Rs 16.19 lakh and the average lending rate stood at 16.3%. The Total Income has grown from Rs 15,333.84 lakh for the year ended March 31, 2021 and Rs 31,341.59 lakh for the year ended March 31, 2022 to Rs 68,376.28 lakh for the year ended March 31, 2023. For the nine months period ended December 31, 2023, the Total Income is at Rs 75,129.05 lakh. The total borrowings as at December 31, 2023, March 31, 2023, March 31, 2022 and March 31, 2021 amounted to Rs 4,17,292.71 lakh, Rs 3,14,893.45 lakh, Rs 1,80,183.86 lakh and Rs 76,569.48 lakh respectively. They rely on long-term and medium-term borrowings from banks; amongst others, including issuances of non-convertible debentures. They have a diversified lender base comprising public sector undertakings, private banks, mutual funds and others. This NCD is given IND A/Stable by India Ratings & Research Private Limited and the instruments with this rating are considered to have adequate degree of safety regarding timely servicing financial obligation. Also company has shown good growth and its expected interest rates may go down in next 6-12 months. So, good rating and lucrative coupon rates make this offer an option for investors looking for medium term fixed income. We give SUBSCRIBE rating to debt issue.
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