UGRO Capital raises Rs 380 crore via NCDs from FMO
UGRO Capital, an India-based DataTech NBFC specialising in MSME and small-business financing, has raised Rs 380 crore through a non-convertible debenture issue fully subscribed by FMO, the Dutch entrepreneurial development bank. The investment marks FMO's third investment in the lender in less than three years.
The MSME-focused lending platform issued 38,000 senior, secured, rated, listed, redeemable and transferable non-convertible debentures with a five-year tenor.
FMO, formally Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V., is the Dutch entrepreneurial development bank. It previously invested Rs 250 crore in UGRO Capital through NCDs in December 2023 and a further Rs 260 crore in February 2025.
UGRO Capital said the proceeds from the latest issue will be used to finance women-owned and women-led small and medium-sized enterprises, youth-owned and youth-led businesses, and rural SMEs.
The funding will also contribute to the financing or refinancing of eligible green projects in line with FMO's sustainability approach.
According to UGRO Capital, the five-year tenor is aligned with the longer-duration secured lending it provides to small businesses in Tier-3 locations and beyond.
The investment forms part of the company's strategy to build a more diversified, long-tenor institutional funding base and reduce its dependence on the domestic banking system.
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It has raised more than Rs 1,300 crore in debt from development finance institutions and impact-focused investors in India and overseas. These include FMO, Danish sovereign development fund IFU, the Asian Development Bank, Triple Jump, BlueOrchard, responsAbility, Calvert Impact Capital, Enabling Qapital, GMO, WaterEquity and MicroVest.
UGRO Capital lends to small businesses that have historically had limited access to formal credit, including enterprises with annual turnover below Rs 3 crore that may lack the tax records and audited financial statements typically required by conventional lenders.
UGRO Capital uses its proprietary GRO Score underwriting model to assess borrowers on the basis of banking cash flows, which are verified in person by branch staff.
Its Emerging Market lending is secured against residential or commercial property and has an average loan size of about Rs 18 lakh. Around 80% of the portfolio is in Tier-3 locations and beyond.
The company also operates GROx, an embedded merchant finance platform that provides working capital to kirana stores, agricultural-input dealers, pharmaceutical distributors and other nano enterprises. The average loan size on the platform is about Rs 1 lakh.
Capital that maps to development goals
UGRO Capital's Social Impact Report for 2024-25, verified by Dun & Bradstreet India, maps its portfolio to eight United Nations Sustainable Development Goals.
These cover decent work and economic growth, industry and infrastructure, reduced inequalities, gender equality, affordable and clean energy, health and well-being, clean water and sanitation, and quality education.
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