Credit and finance for MSMEs: The investment in UGRO is in line with the green strategic partnership between India and Denmark that was signed by Prime Minister Narendra Modi and Denmark’s Prime Minister Mette Frederiksen two years ago.
Sustainability for MSMEs: Investment Fund for Developing Countries (IFU), a Danish development finance institution providing risk capital for private sector investments in developing and emerging markets, on Wednesday said it has put DKK 200 million (around Rs 240 crore) in the lending platform for small businesses U GRO Capital. The investment, made on behalf of the Danish SDG Investment Fund, which is backed by large Danish pension funds and private investors, helps U GRO fund businesses that seek to transition into greening their business operations.
As part of the investment, it has been agreed to develop and implement a climate finance strategy framework as well as climate-related loan products that will support the green transition, IFU said.
“This Rs 240 crore equity funding has already been disbursed as U GRO is also into green financing and sustainability lending. The IFU funding came last month to augment our capital and grow our business. We disburse around Rs 500-600 crore loans per month,” Shachindra Nath, Vice Chairman and Managing Director, U GRO Capital told FE Aspire.
U GRO Capital’s loan book stood at nearly Rs 6,300 crore at the end of FY23 vis-a-vis Rs 5,095 crore during Q3. The company had disbursed Rs 1,874 crore in loans while its profit after tax (PAT) stood at Rs 13.1 crore as of Q3. Net NPAs, on the other hand, were 1.1 per cent of AUM.
“This is our second equity capital raise since inception, and we intend to gain 1 per cent market share with 1 million small businesses. It has been our endeavour to change the life of small businesses, and having a global development financial institution like IFU as a partner is helping us achieve our mission at an accelerated pace,” Nath said.
The investment in U GRO is in line with the green strategic partnership between India and Denmark that was signed by Prime Minister Narendra Modi and Denmark’s Prime Minister Mette Frederiksen two years ago. IFU said it has received additional funds to invest in climate-related and green projects in India.
“IFU has invested in more than 100 companies in India, and we have a prioritised sector approach towards renewable energy and green infrastructure, financial services, healthcare as well as sustainable food with current investments representing all sectors in India. India is expected to continue being a significant investment destination for IFU in the coming years,” said Deepa Hingorani, Senior Vice President, IFU.