UGROCAP

UGRO Capital Limited Q4’23 and FY23 EMPOWERING MSME ECOSYSTEM NSE: UGROCAP | BSE: 511742 Slide 1 Safe Harbor This presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any securities, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied upon in connection with, any contract or commitment therefor. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. 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Slide 2 TRANSITIONING FROM COLLATERAL BACKED LENDING TO CASHFLOW BACKED LENDING Slide 4 EMPOWERING MSME LENDING WITH THE POWER OF DATA Slide 6 UGRO Capital – Scaling up through power of Data Vast customer ecosystem with substantial data footprint, promising unprecedented data-driven learning and tremendous credit penetration opportunities PROCESSED LARGE VOLUME OF DATA SERVED WIDE CUSTOMER BASE SIGNIGICANT HEADROOM TO GROW Exponentially growing repository of transaction data A growing served-customer base covering micro to A massive ecosystem capturing data footprints of enabling pioneering work in data-driven underwriting prime segments through PAN India presence India’s largest companies and supply chains 63,000+ 1.94L+ 48,000+ 1.6L Cr + 25L+ 10%+ GRO Score Processed Bureau Records Customers Served Turnover Of Live Linked Counterparties Coverage of India’s Logins Analyzed Customer Base* Universe Registered Companies 95%+ 19%+ 93,000+ 115+ 34,000+ 4,000+ Coverage of 500 Coverage of India’s Bank Statements Anchors & OEMS GST records Analyzed Served Pin-codes companies by market GST registered Analysed cap companies Heading Towards Serving 1% of MSME Lending Market *sum of total bank credits for prime-branch sourced live customer base Slide 7 GRO Score 3.0 – Building Blocks India’s first statistical scorecard triangulating repayment history, banking behavior and GST returns data for holistic assessment of MSME, now live in production ALGO LAYER API LAYER FEATURE LAYER Power of machine learning algorithms creating API integrations facilitating data flow directly from Knowledge-rich feature library enabling unparalleled bespoke data-driven underwriting models which are source discovery process configured on rule engine Repayment history Repayment history All credit facilities for all loan applicants with 36 Borrowing history | Composition of debt | Previous months history repayment discipline | Pace of debt build up Bank statement Banking transactions Twelve months’ transaction data of all submitted Consistency of credits | Transaction intensity | bank statements Stability of account balance Gro Score GST transaction data GST transaction report 3.0 Previous two FY’s monthly data for sales and Sales & purchase momentum |Consistency and purchases growth |Counterparty relationships Triangulation GST Debt to banking turnover | Banking turnover to GST transaction sales data Slide 9 GRO Score – Risk Bands Stacking up on Historical Portfolio Default rates across score bands – All customers assessed Since Inception Score Band wise break up of recent disbursals (Apr 22 – Sep 22) 2.6% 2.5% 6% 1% 5% 1.7% 1.5% A B 1.2% 1.2% GRO Score A & B C 0.8% ~88% 0.6% 32% 56% D E A B C D,E Disbursed cases Not Disbusred cases Segments A, B –contributing to majority share of disbursals and lever for calibrated increase of throughput To that effect we have analysed both sets of data i.e. cases disbursed and rejected by UGRO. Performance across risk bands was observed to be stacking up for both sets of data Explanation note : Scores are computed based on repayment track record of loan applicants and submitted bank statements. Default rate tracking is done based on quarter-end credit bureau data; “default” represents incidence of 90 dpd in any business purpose credit facility reportedin bureau during a period of six months from the point of assessment at UGroCapital Slide 10 The journey of empowering MSME ecosystem Russia Ukraine Raised 340Cr War Series of Credit Crises Equity Increasing • ILFS Covid –19 Interest Rate & • DHFL Wave 2 Global inflation • Yes Bank Operational Slow Down 6,081 Cr Covid –19 Partnered with CRISIL to Operational Shut down identify and shortlist 9 (Apr –Jun) 2,969 Cr sectors and 200+ subsectors 1,375 Cr 861 Cr 79 Cr Raised Started Capital Disbursing Jul’18 Jan’19 Mar’19 Mar’20 Jun’21 Mar’22 Mar’23 Set up phase Creating Infra to Build scale Growth Phase Continuing Growth Journey • Incorporation and setting up of the • Cautiously business expansion given • Data tripod of underwriting & GRO • Scaling L-a-a-S Model Company Marco economic headwinds Score 2.0 • GRO Score 3.0 • Raised 900+ Cr Capital from Marquee • Focus on digitizing business processes • Formidable distribution strength & PE Investors (ADV, NewQuest, Samena and product diversification laying foundation of L-a-a-S model • Launched D2C customer channel & PAG) Slide 11 Continuous Growth Journey on the back of our 3 pillars of strength Distribution is Set Underwriting is built out Liability is stable 674, 193, 200, 83, 10, 15% 13% GST 207, 8% 14% 2% 9% 173, 554, FY23 Total on Q4’23 Total FY23 Net 12% Q4’23 Net 254, 95, 12% book debt on book debt Disbursement Disbursement 778, 10% 1,265, 15% 301, INR 4,641Cr 2,564, 109, INR 1,459Cr 53% raised 53% raised 360, 6% 55% 8% INR 2,400Cr INR 618Cr 58% 70, 474, 549, 206, 11% 20% 12% 14% Prime Micro SCF Machinery SCF TL NCD CP DFI Short term 422217500244706,,,,5 9821, %%5003%%% Gro 253564057,591446,,,, 46111,%225 5%%%5% score 3.0 98 1,200+ 105+ Off Book INR 2,555 Cr INR 913 Cr Disbursement Branches GRO Partners Anchors + OEMs FY23 Q4’23 10 1,700+ 66 Debt Partners Co-lending Employees Bank Bureau Lenders Partners Direct to Customer Including off roll channel launched in employees Apr’23 Slide 12 Performance Highlights for Q4FY23 01 02 03 04 Asset Asset Liability & Profitability Growth Quality Co - lending GNPA Borrowings AUM Net Total Income As on Mar’23 : 6,081 Cr Q4’FY23 : 126.8Cr As on Mar’23 : 1.6% As on Mar’23 : 3,149Cr (1.7% as on Dec’22) (65+ lenders) (+19% Q-o-Q) (+17% Q-o-Q) (+105% Y-o-Y) (+101% Y-o-Y) NNPA Lending as a service As on Mar’23 : 0.9% Gross Loans Originated PPOP - Partnership with 10co - (1.1% as on Dec’22) lenders / co -originators Q4’FY23 : 2,314Cr Q4’FY23 : 51.1 Cr (+23% Q-o-Q) - 2,442 cr off-book AUM (+31% Q-o-Q) Collection efficiency * (+140% Y-o-Y) (+38% Q-o-Q) (+196% Y-o-Y) For Mar’23 : 97.6% (97.3% for Dec’22) Portfolio yield Pre-tax Profit Cost of Borrowings Restructured book As on Mar’23: 17.3% Q4’FY23 : 33.7 Cr As on Mar’23 : 10.6% As on Mar’23 : 1.1% (+51% Q-o-Q) (% Total AUM) (+319% Y-o-Y) * Total Collections (including overdue) / Current month demand Slide 14 Performance Highlights for Q4FY23 FY23 FY22 Q4’FY23 Q4’FY22 AUM (INR Cr) 6,081 2,969 105% 6,081 2,969 105% Net Disbursement (INR Cr)* 4,641 2,251 106% 1,459 612 138% Off-book AUM 40% 16% 150% 40% 16% 150% Net Total Income %$ 12.2% 9.2% 33% 13.7% 10.4% 32% Cost to Income Ratio 62% 72% 13% 56% 73% 23% Adj. ROA 1 1.7% 0.6% 167% 2.2% 0.9% 159% Adj. ROE 1 2 6.2% 1.5% 308% 9.5% 2.5% 276% CRAR 20.2% 34.4% 20.2% 34.4% Leverage 3.2x 1.9x 3.2x 1.9x *Net Disbursement = Gross Disbursements –Repayment received in Supply Chain Financing during the period I $On Average Gross on-books AUM 1Post factoring impact of deferred tax reversal (~INR 4.2 Cr) adjusted PAT of ~ 17.3 Cr, for Q3’23; (~INR 9.2 Cr) adjusted PATof ~23.2 Cr, for Q4’23 ; (~INR 20.6 Cr) adjusted PAT of INR 60.4 Cr, for FY23 2Reduction in Net worth on account of accounting adjustment for implementing ESOP scheme through trust route Slide 15 AUM Trend (Product wise Q-o-Q) Amount in INR Cr AUM increased to INR 6,081 Cr as on Mar’23 from INR 5,095 Cr as on Dec’22 (+19%) and INR 2,970 Cr as on Mar’22 ( +105%). 105% 19% 6,081 715 12% 5,095 701 12% 4,375 746 567 9% 3,656 718 564 472 8% 458 465 2,970 620 338 2,589 397 361 535 18% 240 1,899 31% 356 1,934 523 253 9% 170 1,528 183 1 2 0 8 6 7 1 3 0 % % 1,261 1,317 1,375 120 375 74 259 1,000 215 766 26% 72 170 13% 83 219 37 574 5% 4 3 21 3 0 6 0 16 .3 % % 11 3 1 2 8 6 1 419 1,294 1,462 1,727 28% 26%` 976 1,022 34% 1,150 768 525 40% 555 Q4'FY21 Q1'FY22 Q2'FY22 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Prime - Secured Prime - Unsecured Micro Enterprise Loan Supply Chain Financing Machinery Loan Partnerships & Alliances *Percentages represent product wise portfolio mix Slide 16 Loan Origination (Product wise Q-o-Q) Amount in INR Cr Gross loans originated increased to INR 2,314 Cr in Q4’FY23 from INR 1,874 Cr in Q2’FY23 (+23%) and INR 962 Cr in Q4’FY22(+140%). 140% 23% 2,314 193 8% 1,874 173 7% 1,653 148 134 193 1,359 963 42% 126 143 1,053 775 119 962 610 199 789 107 70 81 1 8 1 % % 508 206 9% 136 196 280 120 449 36 378 39% 91 418 18% 332 183 41 387 62 5% 353 39 8 1 % 4% 27 195 44 305 79 111 184 16 4 9 6 4 6 2 1 1 4 1 5 % 1 % % % 1 5 3 4 6 1 3 6 236 268 1 2 0 5 3 0 1 2 1 6 % % 192 251 294 360 16% Q4'FY21 Q1'FY22 Q2'FY22 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Prime - Secured Prime - Unsecured Micro Enterprise Loan Supply Chain Financing Machinery Loan Partnerships & Alliances *Percentages represent product wise portfolio mix Slide 17 Operating & Financial Metrics AUM (INR Cr) Gross Loans Originated / Disbursed (INR Cr) Total Income (INR Cr) & Portfolio Yield$ 17.3% 17.4% 17.3% 6,081 2,314 16.4% 16.7% 5,095 1,874 217 4,375 40% 1,653 190 2,969 3,656 29% 35% 1,359 155 21% 963 114 124 16% 79% 71% 65% 60% 84% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 On-Book Off-book Total Total Income Portfolio Yield (%) Finance Cost (INR Cr) & Cost of Borrowing Operating Expenses (INR Cr) and Cost to Income PBT (INR Cr) and PBT / Avg. Total Assets # 10.3% 10.5% 10.5% 10.5% 10.6% 73.3% 72.1% 3.2% 62.7% 63.9% 82 90 55.9% 2.0% 2.3% 34 69 69 71 1.4% 22 50 53 47 51 54 1.1% 18 8 10 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Finance Cost Cost of borrowing (%) Operating Expenses Cost to Income Ratio (%) PBT ROTA % 984 3,149/ 3.2x 66 1.6% / 0.9% 98 1,700+ 46,000+ Total Debt / GNPA / NNPA Active Net Worth Lenders (Count) Branches Employees Leverage (Total AUM) Borrowers $ Weighted Average AUM yield as on Period End # Annualized ratio based on quarterly average of total assets Slide 18 Well Diversified and Granular Portfolio Product Mix (AUM) Portfolio Concentration in key geographical areas Sector Mix* State wise AUM 12% coverage1 6% 14% 5% 28% 17% 12% 2% 9% 8% 9% 10% 6% 8% 15% 23% 10% 31% 14% 10% 6% Prime - Secured Loans Prime - Unsecured Loans 14% 3% Micro Enterprise Loan Supply Chain Financing Rest of India –5% Machinery Loan Partnerships & Alliances 22% AUM Ticket size State wise branches Micro Prime Total Product category ROI (%) (Cr) (Lakh) Tamil Nadu 19 1 20 Auto Components Chemicals Prime -Secured Loans 1,727 13.7% 74 Rajasthan 15 2 17 Education Electrical Equipment Prime -Unsecured Loans 1,899 19.6% 17 Gujarat 15 1 16 Karnataka 15 1 16 Micro Enterprise Loan 472 21.3% 7 Food Processing HealthCare Telangana 10 1 11 Supply Chain Financing 567 14.3% 95 Hospitality Light Engineering Maharashtra 6 6 Machinery Loan 701 13.5% 35 West Bengal 4 4 Micro Enterprises Other MSME Partnerships & Alliances 715 23.6% 5 Andhra Pradesh 2 2 Others States 1 5 6 Grand Total 6,081 17.3% 18 Total 75 23 98 * Includes Prime –Secured Loans, Prime –Unsecured Loans, Micro Enterprise Loan, Supply Chain Financing, Machinery Loan and Co-lending 1Includes Prime –Secured Loans, Prime –Unsecured Loans, Micro Enterprise Loan, Supply Chain Financing, Machinery Loan and Co-lending Slide 20 ^ Includes allied subsectors of our core sectors Collection Efficiencies, Portfolio provisioning (1/2) Current Month and Overall Collection Efficiency remains robust ECL Data (Mar’23) Current Month Collection (excluding overdue) / Current Month Demand (In Cr) Loan Exposure Loan Exposure (%) Total Collections* (including overdue) / Current Month Demand Stage 1 5,844 96.1% Stage 2 138 2.3% 98.6% 97.7% 97.7% 97.8% 97.8% 97.2% 97.4% Stage 3 99 1.6% 96.9% 96.9% 96.7% 96.4% 96.2% Total 6,081 100.0% 94.3% 93.4% 93.9% 93.9% 93.9% 93.8% 93.5% 93.7% 93.9% 93.4% 93.0% 93.1% Product wise GNPA Product Category AUM (INR Cr) GNPA(%) Prime -Secured Loans 1,727 0.8% Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Prime -Unsecured Loans 1,899 2.9% Micro Enterprise Loan 472 0.7% Key highlights: Supply Chain Financing 567 2.8% • GNPA / NNPA as a % of Total AUM stood at 1.6% / 0.9% as of Mar’23 Machinery Loan 701 0.2% • Stage 3 provisioning coverage stood at ~49% (on-book AUM) Partnerships & Alliances 715 0.0% • Total Restructured portfolio stood at 1.1% of Total AUM Grand Total 6,081 1.6% • Total provisions as of Mar’23 stood at ~ ₹88.0 Cr (1.4% of Total AUM) *Excluding foreclosures Slide 21 Collection Efficiencies, Portfolio provisioning (2/2) Stage 1 has remained stable over last 5 quarters Provision Coverage Ratio 96.9% 48.6% 96.4% 38.0% 96.2% 31.8% 96.1% 26.9% 28.0% 95.6% Mar'22 June'22 Sep'22 Dec'22 Mar'23 Mar'22 June'22 Sep'22 Dec'22 Mar'23 Restructured Loans (standard portfolio) 3.9% 2.7% 1.9% • Stage 1 assets have been around 96% over past 4 quarters 113.3 1.5% 1.1% 96.4 • Restructured loans have decreased from INR 113.3 Cr (3.8% of Total 84.2 76.7 64.9 AUM) as on Mar'22 to INR 64.9 Cr (1.1% of Total AUM) as on Mar'23. • Stage 3 PCR has improved from 26.9% as on Mar'22 to 48.6% as on Mar'23 Mar'22 June'22 Sep'22 Dec'22 Mar'23 Restructured loans % of Total AUM Slide 22 Tri-pronged liability strategy – on-balance sheet, co-lending and assignment Demonstrated ability to manage a prudent mix of on-balance sheet and off-balance sheet approach 1 On-Balance sheet Diversified Lender base across Lending Institutions –Banks, Large NBFCs and DFIs. Multi product approach through TL, NCDs, MLDs, CPs 3 2 Assignments with FIs Co-Lending with Banks/NBFCs 100% PSL Loan book leading to higher Partnership with PSBs, Pvt. Banks and Large demand of securitized pool and a lever to NBFCs to achieve scale with lesser leverage manage ALM and lower on-balance sheet risk Actively partnering with liability providers and focus on building a long-term relationship Slide 24 Lending as a Service (L-a-a-S) - Building India’s largest Co–Lending platform Increasing Mix of off - Book AUM • Secured Business Loans • Agreement under new co-lending regulation –Jun’21 On Book Portfolio Off Book Portfolio • Small Ticket Secured and Unsecured Business Loans 16% 21% 29% 35% 40% • Agreement under new co-lending regulation –Nov’21 1% • Secured Business Loans • Agreement signed in Oct’21 • Secured, Unsecured Business Loans and Machinery Loans 99% • Agreement Signed in Dec’21 84% 79% 71% 65% 60% • Secured Business Loans • Agreement signed in Feb’22 Apr-21 Mar'22 Jun'22 Sep'22 Dec'22 Mar'23 • Secured Business Loans (affordable LAP) • Agreement signed in Jul’22 Off Book AUM 11 478 782 1,272 1,775 2,442 Co-Origination - 144 304 619 915 1,181 4 NBFCs DA & 11 333 478 654 860 1,261 Co-lending Slide 25 Diversified Lender base and continued build-out of liability book Total Debt (INR Cr) and No. of Active Lenders Cost of Borrowing Liability Mix 1% 50 55 63 67 66 5% 4% 3,149 2,885 Count of Lenders 2,725 Total Debt INR 27% 2,208 1,802 10.5% 10.5% 10.5% 10.6% 3,149 Cr 10.3% 63% Term Loan NCD Securitization Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 CP Cash Credit/OD Our liability sanctions have been raised from a diverse set of lenders Public Sector Banks Private Sector Banks Other Institutions DFI SFBs and NBFCs Slide 26 Operating and Financial Performance Slide 27 Finance | Income Statement Income Statement (₹ Cr) FY23 FY22 Y-o-Y Q4FY23 Q3FY23 Q-o-Q Q4FY22 Y-o-Y Interest Income 482.9 272.1 77% 141.1 133.1 6% 94.0 50% Income on Co-Lending / Direct Assignment 154.1 26.9 472% 62.4 42.9 45% 14.6 327% Other Income 46.8 13.1 257% 13.7 13.6 1% 4.3 221% Total Income 683.8 312.1 119% 217.2 189.6 15% 112.8 92% Interest Expenses 293.3 137.3 114% 90.4 81.6 11% 49.6 82% Net Total Income 390.5 174.9 123% 126.8 108.0 17% 63.2 101% Employee Cost 140.7 72.9 93% 40.1 40.5 -1% 28.0 44% Other Expenses 109.1 52.4 108% 35.5 28.6 24% 18.0 98% PPOP 140.6 49.6 184% 51.1 38.9 31% 17.3 196% Credit Cost 56.8 29.4 93% 17.5 16.7 5% 9.3 89% PBT 83.8 20.2 315% 33.7 22.2 51% 8.0 319% Tax 44.1 5.6 683% 19.6 9.1 115% 1.9 909% PAT 39.8 14.6 173% 14.0 13.1 7% 6.1 131% Adj. PAT* 60.4 14.6 315% 23.2 17.3 34% 6.1 282% Return on Avg. Total Assets % 1.1% 0.6% 1.4% 1.4% - 0.9% - Adj. Return on Avg. Total Assets % 1.7% 0.6% 2.2% 1.8% - 0.9% - *Adjusted PAT = PAT without considering impact of deferred tax reversal of INR 4.2 Cr in Q3’23, 9.2 Cr in Q4’23 and 20.6 Cr in FY23; Adj. PAT for Q3’23 is INR ~17.3 Cr, Q4’23 is INR 23.2 Cr and FY23 is INR 60.4 Cr # Adj. Return on Avg. Total Assets % = Return on Avg. Total Assets calculated on Adj. PAT Slide 28 Finance | Balance Sheet Assets (INR Cr) Mar-22 Mar-23 Liability (INR Cr) Mar-22 Mar-23 Financial Assets Financial liabilities Cash and Bank Balance 188.4 211.8 Trade payables 7.1 14.1 Loans 2,451.1 3,806.4 Borrowings 1,802.2 3,148.9 Investments 69.4 60.1 Other financial liabilities 47.2 77.4 Other financial assets 8.1 25.3 Total Financial Liabilities (A) 1,856.6 3,240.5 Total Financial Assets (A) 2,717.0 4,103.6 Total Non-Financial Liabilities (B) 31.8 81.1 Non Financial Assets Equity Property, plant and equipment, etc 61.6 65.6 Equity share capital 70.6 69.3 Deferred tax assets and Current tax assets (net) 45.5 27.5 Other equity 896.0 914.7 Other Non Financial Assets 30.8 108.9 Equity (C) 966.6 984.0 Total Non-Financial Assets (B) 137.9 202.0 Total Liabilities & Equity (A)+(B)+(C) 2,854.9 4,305.6 Total Assets (A)+(B) 2,854.9 4,305.6 Slide 29 Board, Management and Shareholding Slide 30 Independently Supervised : Eminent Board of Directors SatyanandaMishra – S. Karuppasamy- Abhijit Sen - KarnamSekar– Hemant Bhargava – Non-Executive Chairman Chairman, Compliance Chairman, Audit Committee Independent Director Independent Director Ex-Chairman, MCX, Ex-CIC, GOI, Committee Ex-CFO, Citi-India Ex -MD & CEO of Indian Ex-Chairman in charge and MD Ex-Director -SIDBI Ex-Executive Director, RBI Overseas Bank of LIC Rajeev K. Agarwal - SmitaAggarwal – Amit Gupta Chetan Gupta Manoj Sehrawat Chairman, Stakeholder Independent Director (New Quest Nominee) (SamenaNominee) (ADV Nominee) Committee Global Investment Advisor at Founding Partner of New Quest Managing Director at Samena Partner at ADV Ex-Whole Time Member, SEBI Flourish Ventures Capital Legend: Independent Directors, Non-executive Directors Slide 31 Professionally Managed : 190+ years of cumulative experience Shachindra Nath - Amit Mande - Anuj Pandey - Kishore Lodha - Sunil Lotke – Vice Chairman & Managing Chief Revenue Officer Chief Risk Officer Chief Financial Officer Chief Legal & Compliance Director 20+ Years of Experience 20+ Years of Experience 20+ Years of Experience Officer 25+ Years of Experience 19+ Years of Experience J Sathiayan - Pia Shome - Rishabh Garg - Nirav Shah - Subrata Das - Chief Business Officer Chief People Officer Chief Technology Officer Chief Strategy Officer & Chief Innovation Officer 25+ Years of Experience 15+ Years of Experience 17+ Years of Experience Head of IR 17+ Years of Experience 17+ Years of Experience Slide 32 Institutionally Owned : Majority held by Institutional Investors Shareholding Pattern* Fund raising update UGRO announced Equity Fund Raise of INR 340.5 Cr through mix of Qualified Institutional placement and preferential allotment 16.49% Other Public shareholders, 21.12% QIP Issue of INR 100.5 Cr-Raising of funds was completed in the month of April 2023. Following investors were allotted shares in QIP Insurance Companies, 6.28% 16.36% • SBI Life Insurance • Go Digit Insurance (New Quest acquired by TPG) Foreign Portfolio Investors, 2.56% • SBI General Insurance • Other Marquee Investors Body Corporate, 8.60% Preferential Issue of INR 240 Cr-UGRO Capital Promoter, 2.19% 16.36% has entered into definitive share subscription 10.04% agreement with IFU. The fund proceeds will be received in Q1’24. Post preferential allotment IFU’s shareholding will be 16.49% *Shareholding pattern as on May 12, 2023 post issuance of equity to IFU Slide 33 Sector Focused Approach, Multiple Products and Large Distribution Strength Hospitality 23 Supply Chain Financing Prime Branches Business Loans Light Engineering 75 Secured by Property Unsecured Micro Branches Auto Components Business 1,200+ Loans Chemicals GRO Partners Our Product 60+ Food Processing Offering Anchors New Age Education 45+ Products OEMs Healthcare 35+ Electrical Equipment Fintech Partners Machinery Loans Micro Enterprises Loans & Components 940+ 9 sectors are further subdivided into 200+ subsectors basis homogeneity Micro Enterprises of cash flows among MSMEs Sales Employees Slide 35 Multi Pronged Distribution Channel with Product Yields and Avg. Ticket Size Prime Loan Branches Micro Loan Branches Branch-Led Channel – Catering through 95+ branches Product Avg. Ticket Yield % Avg. Ticket Yield % • Prime Loan Branches: 23 branches with origination through LAP 151L 12.9% 8L 20.9% intermediated channel Affordable LAP 37L 15.4% - - • Micro Loan Branches: 75 branches across 5 states, loans directly sourced by sales executives (FOS) Unsecured 17L 19.6% 3L 25.4% Eco-System Channel - Catering through Anchors and OEM partners Product Avg. Ticket Yield % • Supply Chain Financing : Anchor and its ecosystem financing of Supply Chain Machinery Finance 35L 14.3% • Machinery Finance : Secured loans to machine buyers with a charge Supply Chain Finance 95L 13.5% on machines Partnership & Alliances Channel - Catering through Fintech Partners Product Avg. Ticket Yield % • Joint lending partnershipswith NBFCs (downstream). Secured/Unsecured Loans 5L 23.8% • Fintech partners originate loans and provide 5% - 15% FLDG cover Direct Digital Channel – D2C 100% Digital sourcing Product Avg. Ticket Yield % • On tap merchant financing through mobile application Unsecured Merchant Financing 1.3L 24% • Ability to dispense credit through UPI and other forms of payment Slide 36 Lending as a Service (L-a-a-S) Co-Lending is a value accretive model Example of 80:20 Co-Lending PartnershipModel Benefits to Partner Customer ROI of 14.5% Benefits to UGRO Institution (assumption) on INR 1 Lakh Loan • Higher ROA & ROE on account of • Risk weight lower in case of Co- -Better leverage and lending vis –a –vis lending directly to NBFCs -Higher spread • Cost of Capital advantage compared to on -balance sheet combined with no operating cost lending leading to higher returns on risk • High Growth with lower equity adjusted basis capital • Granular build-out of Portfolio • Sizeable sanction and on tap UGRO Earns • Build-out of PSL portfolio Co-lending bank Earns availability of capital • On Book (20% of the loan –INR 20 K) : • End use visibility of funds • ROI of 9.0%on INR 80 K • Testimony of the credit scoring ROI of 14.5% disbursed model • Off Book (80% of the loan –INR 80 K) : • Pari passu risk sharing with the 5.5% Spread(14.5% ROI minus 9.0% partner Co-lending rate) Note : Numbers are provided only for illustrative purpose Slide 37 Lending as a Service (L-a-a-S) is a highly profitable model Sample Illustration Assumptions for Calculation Particulars (INR Cr) Normal Scenario Co-lending Model Particulars Ratios On Balance Sheet On Book –20% Off Book –80% Total Loan Amount 1,00,000 20,000 80,000 1,00,000 Yield 14.5% Equity Capital Deployed 20,000 4,000 - 4,000 Cost of Borrowing 10.5% Interest Income 14,500 2,900 - 2,900 Co-lending spread income - - 3,200 3,200 Spread -On Book Lending 4.0% Interest Expense 8,400 1,680 - 1,680 Spread -Co-lending 4.0% Net interest Income 6,100 1,220 3,200 4,420 Other Income 1,500 300 1,200 1,500 Fee Income 1.5% Net Total Income 7,600 1,520 4,400 5,920 Co-lending -On Book Share 20% Operating Expenses 3,420 684 2,736 3,420 Credit Cost 1,500 300 - 300 D/E 4.0x PBT 2,680 536 1,664 2,200 Cost to Income Ratio 45% Tax 804 161 499 660 PAT 1,876 375 1,165 1,540 Credit cost 1.5% ROA 1.88% 7.70% Tax Rate 30% ROE 9.38% 38.50% Slide 38