NBFC U Gro Announces First Year Profits for SME Lending Activities

Company says it disbursed loans worth 1K Cr INR in Q3

U Gro has launched a direct consumer lending platform, GRO-Direct

U Gro raised 100 Cr INR from the Sachin Bansal and Poonawala family in 2019

Mumbai-based non-bank finance company U Gro Capital, which started disbursing loans in January 2019, announced that it had reached profitability in its first year of operation. U Gro managed to convert its loss of 3.3 Cr INR in the second quarter of FY20 into an after tax profit of 6.9 Cr INR in the third quarter.

U Gro also recorded 15.4% revenue growth from 20.5 Cr INR in the second quarter to 23.7 Cr INR in the third quarter. In addition, the company announced that it had disbursed over 1K Cr INR in the third quarter itself. U Gro claims this is the first fintech to achieve profitability in the first year of commercial operation.

“The third quarter of fiscal 2020 saw the continuation of the accelerated technological aspirations and cautious underwriting strategies that we implemented in the second quarter, with excellent results. ” Shachindra Nath, executive chairman and managing director of U GRO Capital.

U Gro also announced the launch of a beta version of a direct consumer lending platform, GRO-Direct. There are two ways that customers can apply for loans from the GRO-Direct service. First, complete an online form, similar to a traditional loan application. Second, a chatbot, which collects information about users by chatting with the customer.

U GRO Capital, listed on ESB, is a technology-driven lending platform for small and medium-sized businesses. The lending technology company is focused on providing customized lending solutions to small businesses operating in eight industries: healthcare, education, chemicals, food processing or fast-turn consumer goods (FMCG), hospitality, equipment and electrical components, automotive components, light engineering.

In FY20, U Gro noted the following:

  • As of December 31, 2019, he held assets under management (AUM) worth INR 753 for 7,512 loans.
  • U Gro’s loan portfolio is 67% secure and the largest sectoral and geographic concentrations are 18% and 21% respectively.
  • U GRO’s has a partner network of 311 direct sales agents (DSA). The company saw a 34% increase in its partner network in the second quarter of fiscal 20.
  • In the third quarter, it added 21 ecosystem partners and 26 banking, financial services and insurance (BFSI) partners.

In October 2019, U Gro raised 100 Cr INR ($ 14.11 million) from Flipkart co-founder Sachin Bansal and the Poonawala family. The deal was reportedly concluded as two separate securitization and bond transactions. U Gro carried out the first securitization transaction with Poonawalla Finance, a member of the Poonawalla family. In addition, Bansal entered into a non-convertible debenture transaction with U Gro.

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