Fintech company Ugro Capital, which focuses on small enterprises, said that it will raise Rs 340 crore in equity capital through a qualified institutional placement and preferential allotment. The business said that its board has approved the preferential allocation of shares worth Rs 240 crore to the Danish investment fund for sustainable development, IFU (Investeringsfonden för Udviklingslande).

With a qualified institutional placement, an additional Rs 101 crore will be raised from long-term investors such insurance companies, AIFs, and other financial institutions. When the money will be raised was not specified. The business has previously signed a legally binding investment agreement with IFU, a government-owned fund in Denmark that provides risk capital to businesses in emerging markets and developing nations.

Ugro Capital vice chairman and managing director Shachindra Nath, the new fundraise, its second equity capital raising following the first round in 2018, when it had collected Rs 900 crore, will be utilised mostly for forward lending to MSMEs.

By a reverse merger with the publicly traded Chokhani Securities, Ugro launched its operations in April 2018. To do so, it raised equity funding from companies like TPG, NewQuest, PAG, ADV Capital, Sameena Capital, and certain family offices. As of March 2023, its loan book has a value of over 6,000 crore rupees and a run-rate of 500 crore rupees every month.