Acuite upgrades U GRO Capital ratings to Positive

U GRO Capital is a NSE & BSE listed small business lending fintech platform.


• Uptick in disbursements and improvement in collection efficiency during June-August 2021
• Diversification of lender base and strong pipeline of liability for near future
• Robust and resilient portfolio as evidenced through improved collection efficiency and lowered delinquencies

Acuite Ratings and Research has upgraded the rating outlook of U GRO Capital from ‘Stable’ to ‘Positive’.

The company’s INR 1100 crore bank loan and INR 450 crore non-convertible debentures (NCD) have been rated A / Positive. The agency has also reaffirmed Acuite A1 rating to the Commercial paper programme amounting to INR 100 crore.

The rating rational for the upgrade describes following:

In the past few months, U GRO Capital has seen significant momentum in loan disbursements, which was at INR 243 crore in August 2021, INR 260 crore in July 2021 and INR 193 crore in June 2021. The company has also commenced lending under the co-lending partnership with Bank of Baroda of INR 1000 crore since July 2021.

Underlying portfolio continues to be robust and resilient as evidenced from lower delinquencies of 8.9% as on August 31,2021 as against 12.9% as on March 31, 2021 and collection efficiency of over 92% every month since June 2021.

The company has demonstrated its ability to raise INR 705.40 crore by ways of term loans, NCD, Commercial Paper in FY2021 from a diversified base of around 25 lenders including large public and private sector banks. The rating continues to take into account the governance framework of U GRO Capital wherein majority of the Board comprises of Independent Directors, nominee directors and an experienced management team. The rating also factors in the company’s high capitalization levels and low gearing levels assessing it as financially stable.