[Funding alert] U GRO Capital raises about Rs 400 crore as it expects credit demand to grow

Mid-sized non-banking lender U GRO Capital has raised about Rs 400 crore from banks and through other debt instruments as it expects credit demand to gather momentum with the coronavirus-induced lockdown getting lifted in most parts.

The fundraising, during the course of the first quarter, comes even as it sits on a liquidity of over Rs 300 crore, the company said in a statement on Thursday.

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On the asset side, it said as much as 63 percent of the loan book of Rs 847 crore is under a moratorium, but 69 percent of the total assets are secured.

The company's optimism about loan demand stems from rising disbursals which has reached 80 percent of pre-lockdown levels, it said.

"We have cumulatively raised Rs 397 crore from public and private sector banks in term loans and through the government's partial credit guarantee scheme and the targeted long-term repo operations announced by the central bank," Shachindra Nath, Chairman and Managing Director of U GRO Capital, was quoted saying in the statement.

But, during March-July, it sanctioned Rs 150 crore loans, of which over Rs 100 crore are yet to be drawn down.

Earlier in May, U GRO Capital has entered a partnership with Global Value Creation Partners (GVCP) to enable the former’s growth as a leading impact financing company for small businesses.

As part of the partnership, GVCP has placed two global experts — Vincent Polizatto and William Haworth — as advisors to U GRO. These two experts will provide support in the areas of strategy, corporate and risk governance, and overall institutional development.

According to GVCP, its engagement will help U GRO accelerate its development as an environmental, social, and governance lender, and also foster domestic and global partnerships with the impact community.

(Disclaimer: Additional background information has been added to this PTI copy for context)