U GRO Capital crosses Rs. 2,000 crore milestone on loan disbursals; raises Rs. 178 crores of debt from high profile lenders

February 11, 2021: U GRO Capital, a BSE-listed company that provides loans to small businesses, has announced its financial results for the third quarter of fiscal year 2021, achieving a PAT of INR 6.3 crore. This was achieved while maintaining a cautious approach to provisions, with provisions of INR 5.9 growth in the third quarter. Despite the unfavorable economic and trading conditions due to COVID-19, U GRO Capital posted profits for each quarter of FY21.

Key points for the third quarter of FY21 :

Loan Portfolio

  • The Company’s disbursements to date have achieved a growth of INR 2,065 at the end of the third quarter of FY21, despite the continued disruption of VID-19 related activities, disbursements for the last quarter amounted to a growth of INR 368.
  • The company’s monthly payments have surpassed pre-VIDOC levels, with payments for December 2020 reaching a record Rs. 140 crore.
  • As of December 31, 2020, its assets stood at INR 1,127 crore with 8,429 loans outstanding. The loan portfolio is 70% secured, with the largest sector concentration in light manufacturing (24%) and the largest geographical concentration in Delhi NRC (18%).
  • The pro forma portfolios for GNPA (90+ DPD) and NNPA are 2.3% and 1.4%, respectively.

Insurance of legal representatives and liquidity

  • The company increased its liabilities in the third quarter by INR 178 to a total of INR 756 growth in approved liabilities at a blended rate of 10.1%.
  • It has 22 active lenders on its balance sheet, including BPS banks, private sector banks and other financial institutions.
  • The company expanded the number of lenders by 8, including such leading companies as BMI-SBI, Bank of Baroda, HDFC Bank, ICICI Bank and Axis Bank.
  • The company has a high level of liquidity, with nearly 300 crores of cash in INR and 194 crores of penalties on undrawn loans in INR.
  • The company’s CRAR of 77.9% is well above industry standards.

Financial Capability

  • The company is taking a cautious approach to provisioning for loan losses, with a total provision of 21.4 billion.
  • The Company’s total revenues increased to 39.1 INR growth in the third quarter of FY21, compared to 28.9 INR growth in the third quarter of FY20.
  • In the third quarter of FY21, the company announced a PAT of 6.3 INR growth, compared to 6.9 INR growth in the third quarter of FY20.
  • The net worth of the company as of December 31, 2020 is Rs. 950.5 crore.

Operational parameters

  • The GRO Partner Network now has 603 partners, up 16.4% from the second quarter of last year.
  • The company has 28 ecosystem partners and 35 business partners.
  • The company is introducing a loan of less than 15 years, a line of small bonds, higher yields and products with shorter maturities for microenterprises.

Technological Innovation

  • The company is the first lender to complete UAT testing on the GeM Sahay government platform, which provides access to over 2.4 lakh INPs with a total value of 18,935 crore. The platform is expected to be commissioned in February 2021, in line with the Indian government’s plans.
  • The GRO-Chain digital supply chain finance platform will be launched in February 2021. Photo_Shachindra Nath, Executive Chairman and Managing Director, U GRO .

Commenting on the results, Shachindra Nath, Executive Chairman and Chief Executive Officer of U GRO Capital, said, “This quarter has been an exciting one for U GRO Capital as we make steady progress in our efforts to close the $300 billion credit gap for SMEs in India. We have also achieved an operational and strategic turnaround with the launch of our direct sales product line to microenterprises. Broadening financial inclusion is our primary objective and I am delighted with the success of this launch and certainly hope that we can provide the microenterprises in the country with the financing they deserve.

The fact that we have achieved this growth at a time of market turbulence and have remained profitable in every quarter of FY21 is truly remarkable, and all credit goes to the team that has helped make this vision a reality so effectively. With the COVID-19 crisis hopefully coming to an end soon, the country’s small and medium enterprises will be eager to catch up – and they can count on U GRO to be by their side.

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