Small businesses focused fintech UGRO Capital will raise Rs 340 crore in equity capital through a preferential allotment and qualified institutional placement. The company’s board approved Rs 240 crore worth of shares to IFU (Investeringsfonden for Udviklingslande), a Danish sustainable development goals investment fund, on a preferential allotment basis. Another Rs 101 crore will be raised from long-term shareholders such as insurance companies, AIFs, and other financial institutions through a qualified institutional placement. It did not say by when the money will be raised. The company has already entered into a definitive investment agreement with IFU. The Denmark government-owned fund offers risk capital to companies in developing countries and emerging markets.
The fresh capital—UGRO Capital’s second equity capital raise after the first round in 2018 when it had mopped up Rs 900 crore—will primarily be used for onward lending to MSMEs, Ugro Capital Vice Chairman and Managing Director Shachindra Nath said. Ugro began operations in April 2018 through a reverse merger with the publicly traded Chokhani Securities and raised equity capital from the likes of TPG, NewQuest, PAG, ADV Capital, Sameena Capital, and some family offices. Its loan book stood at over Rs 6,000 crore with a monthly disbursement run-rate of Rs 500 crore as of March.