Ugro Capital, the mid-scale non-banking lender focused on supply-side financing for small businesses, is nearly trebling its headcount to 1,000 to drive both footprint and balance-sheet expansion by March when it expects loan book to sniff at Rs 3,500 crore.
The Gurugram-based NBFC has closed July with a live loan of over Rs 1,560 crore on the back of the best-ever disbursal of Rs 260 crore in the month, and the collection efficiency clawed back to 96-97 per cent.
“If we are able to maintain the July disbursal run-rate, which looks more likely, I am confident of closing the current fiscal with a loan book of Rs 3,500 crore or thereabout. As of end July, our loan book crossed Rs 1,560 crore,” Shachindra Nath, chairman and managing director of Ugro Capital, told PTI on Thursday.
As of end June, loan book was Rs 1,375 crore and Rs 847 crore in June 2020, registering a 62 per cent increase, he said, adding the cumulative disbursements crossed Rs 3,000 crore so far.
He said because of the pandemic, April and May numbers were low at Rs 196 crore and Rs 193 crore respectively. But July surprised with the best ever numbers and August so far has been very encouraging.
Ugro Capital was formed by Nath in 2017 after buying out Chokhani Securities, which is a listed entity on the BSE and was also listed on the NSE on Thursday. It began lending operations in April 2019 and closed the first year of operations with a loan book of Rs 850 crore.
“We’ve aggressive growth plans for the year as we expect businesses to do well with the economy coming out of the pandemic. Our plans include taking our headcount to 1,000 by next March which was only 300 in March 2021. Of this, we’ve already added 100 people as of July, and 600 more will join us through the course of the fiscal,” Nath said, adding when we closed our first year of operations we were just a 130 people organisation.
“This is needed as we are more than doubling our branch network to 75 from 34 now and adding micro locations by another 50,” he said.
About growth capital funding, he said the company has a credit line of Rs 900 crore from over 40 lenders, yet its debt to equity ratio is only 0.86x, he said, adding moreover it has a good cash on the balance-sheet at around Rs 300 crore.
He admitted that asset quality was in bad shape in April and May but now it is normal at around 96-97 per cent of collection efficiency in July.
Seven per cent of the book is restructured (under moratorium) now as education and hospitality customers have been impacted badly because of the lockdowns.
Gross NPA stood at 2.29 per cent and net NPA at 1.88 per cent in June 2021.
The cost of funds has come down to 10.55 per cent now from 11.62 per cent before the pandemic boosting its yields by a full 100 bps to 15.5 per cent now.
He said 74 per cent of the loan book is secured and the largest sectoral concentration is light engineering (29 per cent) and the largest geographical concentration is Delhi NCR (20 per cent).
