Whalesbook
UGRO Capital is embarking on a significant strategic recalibration, gradually phasing out its direct selling agent (DSA)-led, lower-yield origination channels. The Mumbai-based non-banking financial company (NBFC) is actively rebalancing its loan book, which currently holds approximately ₹10,000 crore in low-yield segments compared to about ₹5,000 crore in higher-yield businesses. This transition prioritizes enhancing profitability by focusing on yield improvements rather than solely on reducing borrowing costs.
Strategic Vertical Shift
The company has identified Emerging Market Loans Against Property (LAP) and Embedded Finance as key growth engines. Emerging Market LAP offers yields between 18-22%, while embedded finance through platforms like MyShubhLife can exceed 25%. The embedded finance vertical has rapidly grown to ₹2,280 crore in assets under management (AUM) within five quarters, serving over 2.5 lakh customers. UGRO Capital also completed the acquisition of Profectus Capital in July 2025 for ₹1,400 crore, adding a ₹3,500 crore secured asset book and expected annual cost synergies of ₹150 crore.
Profitability and Operational Goals
UGRO Capital aims to achieve annualised cost savings of ₹200–220 crore by streamlining operations and eliminating expenses from exited business lines. The company intends to maintain capital adequacy without requiring fresh equity infusion. By FY29, UGRO Capital projects its return on assets (RoA) to climb from the current ~2.1% to a target range of 3-3.5%. This focus on profitability comes after a period of aggressive balance-sheet expansion, with AUM growing from ₹3,000 crore in FY22 to over ₹15,000 crore in FY26.
Market Resilience and Technology
Founder and Managing Director Shachindra Nath expressed confidence in the resilience of UGRO’s MSME customer base, noting their focus on domestic demand in tier-2 and tier-3 markets. These clients, including retailers, bakeries, and small manufacturers, are insulated from global export-linked uncertainties. The company has also made substantial investments, exceeding ₹150 crore, in data analytics and technology, including its patented underwriting engine, GRO Score, to maintain a competitive edge.