SUMMARY
- MSME-centric digital lender NeoGrowth has secured debt funding from UTI International Wealth Creator.
- The company board has given a nod for the issuance and distribution of up to 4,200 NCDs with the aim to raise up to Rs 42 crore.
- NeoGrowth is looking to secure Rs 500 crore in growth capital through private equity investments.
MSME-centric digital lender NeoGrowth has secured debt funding from UTI International Wealth Creator. This marks the company’s second round of debt financing for the current year.
The Mumbai-based company’s board has given the nod for the issuance and distribution of up to 4,200 non-convertible debentures (NCDs) with the aim to raise up to Rs 42 crore (roughly $5 million), as per its regulatory filings with the RoC.
These NCDs will carry an annual interest rate of 11.7%. UTI International Wealth Creator 4 is a debt fund operated by UTI Asset Management Company.
The debt fund has come at a time when NeoGrowth is looking to secure Rs 500 crore in growth capital through private equity investments. The firm has managed assets worth Rs 2,750 crore at the close of FY24 and is targeting to achieve an asset under management (AUM) of Rs 4,000 crore by the end of FY25.
NBFC NeoGrowth, co-founded by Dhruv Khaitan and Piyush Khaitan, provides short-term, unsecured loans to MSMEs, offering loans up to Rs 75 lakh with a repayment period of up to 100 months.
To date, the company has secured around $138 million through a combination of equity and debt funding from investors such as MicroVest, FMO, Omidyar Network, DFC, among others.
NeoGrowth has seen a 57% growth in its gross revenue, reaching Rs 601 crore in FY24 from Rs 381 crore in FY23. Additionally, its profit before tax has grown nearly four times to Rs 95 crore from Rs 24 crore in the same period.
