UGRO Capital, a tech-driven NBFC focused on MSME lending, has launched a public issue of secured, redeemable, rated, and listed non-convertible debentures (NCDs) to raise up to ₹200 crore. The issue opened on April 3, 2025, and will remain open until April 21, 2025, unless it closes earlier, as per SEBI guidelines. This NCD issue offers investors an opportunity to earn high fixed returns, with effective annualised yields reaching up to 11.01%.
Structure of the NCD Issue
UGRO Capital has structured the NCD issue with a base size of ₹100 crore and included a green shoe option of an additional ₹100 crore, bringing the total fundraising potential to ₹200 crore. Each NCD carries a face value of ₹1,000, and investors must apply for a minimum of 10 NCDs, amounting to ₹10,000.
The NCDs will be listed on both the NSE and BSE, ensuring liquidity and ease of trading for investors. The NSE will act as the designated stock exchange for the issue.
High-Yield Options Across Multiple Series
UGRO Capital has offered the NCDs in five different series, providing investors with flexible tenors and interest payment options. Investors can choose between monthly or annual payouts, based on their cash flow preferences.
Here’s a detailed breakdown of the NCD options:
| Series | Tenor | Coupon Rate (p.a.) | Frequency | Effective Yield (p.a.) |
|---|---|---|---|---|
| I | 18 months | 10.00% | Monthly | 10.47% |
| II | 18 months | 10.39% | Annual | 10.47% |
| III | 24 months | 10.15% | Monthly | 10.64% |
| IV | 30 months | 10.25% | Monthly | 10.75% |
| V* | 42 months | 10.50% | Monthly | 11.01% |
Series V offers the highest yield, making it the most attractive option for long-term income-seeking investors.
Credit Rating and Security
India Ratings and Research has rated the NCDs IND A+/Stable, which signifies adequate credit quality and moderate safety regarding timely servicing of financial obligations. While the rating sits below AA, it remains in the investment-grade category, and the “Stable” outlook suggests no immediate risk of downgrade.
The NCDs are secured instruments, meaning UGRO Capital will back them with identified assets, giving investors an additional layer of protection.
Use of Proceeds
UGRO Capital plans to channel at least 75% of the net proceeds from this NCD issue into onward lending, financing, and refinancing existing borrowings. The company will utilize the remaining up to 25% for general corporate purposes, such as business expansion, operational enhancement, or digital infrastructure development.
This allocation strategy shows UGRO Capital’s focus on core lending activities and supports its continued growth in the MSME credit space.
Strong Growth Trajectory and Financial Health
UGRO Capital has demonstrated impressive growth over the last two years. As of December 31, 2024, the company reported:
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Capital Adequacy Ratio (CRAR): 21.52%
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Assets Under Management (AUM): ₹9,04,705.74 lakh
The AUM has nearly tripled in two years, climbing from ₹2,96,890.60 lakh in FY22. This rapid growth reflects the company’s successful focus on MSME lending, a segment that continues to gain attention in India’s post-pandemic economic recovery.
A CRAR of over 21% gives the company a strong capital buffer, far above the regulatory minimum. This capital strength enhances investor confidence and indicates UGRO’s capacity to expand while managing risk.
Focus on MSME Lending with Technology Backbone
UGRO Capital operates as a tech-enabled NBFC, targeting the MSME (Micro, Small, and Medium Enterprises) sector, which remains underserved by traditional banks. The company leverages advanced data analytics, digital underwriting tools, and sector-specific lending models to offer quick, customized credit solutions.
By combining financial expertise with digital innovation, UGRO aims to bridge the credit gap in the MSME ecosystem. Its lending platform evaluates borrower profiles in real time, reducing disbursement turnaround times and improving loan quality.
Key Entities Managing the Issue
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Lead Manager: Tipsons Consultancy Services
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Registrar: MUFG Intime India (formerly Link Intime India Pvt Ltd)
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Debenture Trustee: MITCON Credentia Trusteeship Services
These stakeholders ensure transparency, compliance, and smooth operations for the entire issue, offering investors a secure and organized subscription process.
What Makes This NCD Issue Stand Out?
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Attractive Returns: With yields reaching up to 11.01%, these NCDs offer one of the highest returns among current fixed-income instruments in the market.
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Short-to-Medium Tenors: Investors get flexible maturity options ranging from 18 to 42 months, aligning with varied investment goals.
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Monthly/Annual Payouts: UGRO has included options for monthly income seekers and those preferring annual interest or capital appreciation.
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Investment-Grade Rating: The IND A+/Stable rating by India Ratings ensures a balance between yield and security.
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Secured NCD Structure: The backing by UGRO’s secured assets reduces credit risk for investors.
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Growth-Oriented Issuer: With a threefold AUM increase in two years and a solid capital base, UGRO Capital signals financial strength and sectoral expertise.
Ideal Investor Profile
These NCDs suit:
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Retail and HNI investors seeking high monthly returns with defined tenure
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Retired professionals looking for steady income
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Conservative investors wanting fixed returns while accepting moderate risk
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Diversified portfolios seeking non-equity exposure with competitive yields
Summary Table
| Particulars | Details |
|---|---|
| Issuer | UGRO Capital |
| Issue Type | Secured, Listed, Redeemable NCDs |
| Issue Opening Date | April 3, 2025 |
| Issue Closing Date | April 21, 2025 |
| Base Issue Size | ₹100 crore |
| Green Shoe Option | ₹100 crore |
| Total Issue Size | ₹200 crore |
| Face Value | ₹1,000 per NCD |
| Minimum Investment | ₹10,000 (10 NCDs) |
| Tenors Available | 18, 24, 30, and 42 months |
| Interest Payout Options | Monthly and Annual |
| Highest Yield Offered | 11.01% (Series V, 42 months) |
| Credit Rating | IND A+/Stable by India Ratings |
| Listing | NSE and BSE |
| Use of Proceeds | Lending, Refinancing, Corporate Use |
| Lead Manager | Tipsons Consultancy Services |
| Registrar | MUFG Intime India |
| Debenture Trustee | MITCON Credentia Trusteeship Services |
Final Thoughts
UGRO Capital’s NCD offering provides a compelling investment option for those seeking high-yield, fixed-income opportunities. With tenors under four years, monthly or annual interest payments, and double-digit returns, this issue addresses the needs of both income-focused and short-term investors.
The issuer’s focus on MSMEs, supported by a strong digital platform and a solid financial foundation, positions UGRO as a rising star in the NBFC space. Investors seeking a balance between attractive returns and moderate risk should consider acting early, given the first-come, first-served allotment method.
As always, investors should assess their risk appetite, investment horizon, and cash flow needs before investing. But for those seeking competitive, secured returns in a rising rate environment, UGRO Capital’s NCDs stand out as a timely and rewarding opportunity.
