Credit and Finance for MSMEs: MSME lending platform U GRO Capital on Monday reported a profit after tax (PAT) of Rs 7.3 crore in Q1 FY23, up 329 per cent from Rs 1.7 crore in Q1 FY22 with gross loans originated jumping over 311 per cent to Rs 1,359 crore in Q1 from the year-ago period and 41 per cent from Q4 FY22. PAT during the previous quarter stood at Rs 6.1 crore. The total income of the company grew over 141 per cent YoY in Q1 FY23 to Rs 123.8 crore from Rs 51.3 crore in Q1 FY22. The QoQ growth stood at more than 8.4 per cent from Rs 114.2 crore in Q4 FY22.
“We have been pioneers of ‘Lending as a service’ by harnessing the power of co-lending/co-origination models and steering the company towards transitioning into a lending platform through off-balance sheet AUM approach. Operational efficiencies have started to kick in with improving profitability with each passing quarter,” said Shachindra Nath, Vice Chairman and Managing Director of U GRO Capital in a statement.
U GRO Capital’s assets under management (AUM) stood at Rs 3,656 crore as of June 30, 2022, with over 166 per cent growth from June 30, 2021. The company said it is on track to cross the Rs 7,000-crore AUM mark by March 2023 and “achieve AUM of Rs 20,000 crore by 2025, as we achieved our highest ever disbursement (of Rs 1,350 crore) in Q1 FY23,” said Nath.
In terms of defaults, the gross non-performing assets (GNPAs) for U GRO were 1.7 per cent of total AUM while net NPAs stood at 1.2 per cent during Q1 FY23. The company’s total debt was Rs 2,208 crore as of June 2022 while the overall debt to equity ratio was 2.26x.
U GRO had 63 lenders on its platform as of June with the addition of eight new lenders during the first quarter. With respect to the number of customers, branches, and employee strength, the company added over 5,000 customers to take the total customer count to more than 25,000 customers. It had 96 branches and over 1,275 employees as of June 2022.
For the previous financial year 2021-22, U GRO had disbursed Rs 3,138 crore MSME loans, up 2.5X from Rs 1,278 crore in FY21 while the gross NPA ratio for the company was around 2 per cent and collection efficiency as of March 2022 was near 100 per cent. The lending amount on U GRO ranges between Rs 50 lakh and Rs 2.5 crore at an interest rate beginning from 8 per cent and a maximum tenure of 120 months. The company has already switched to the Reserve Bank of India’s non-performing assets (NPA) upgradation norms.