Draft Prospectus

August 12, 2022

U GRO Capital Limited

(Our Company was incorporated as Chokhani Securities Private Limited under the Companies Act, 1956 on February 10, 1993 with the Registrar of Companies, Maharashtra at Mumbai. Our Company was subsequently converted to a public limited company pursuant to the fresh Certificate of Incorporation issued by the RoC on July 26, 1994. The name of the Company was subsequently changed from "Chokhani Securities Limited" to "U GRO Capital Limited" and the fresh Certificate of Incorporation was issued by RoC on September 26, 2018. The CIN of our Company is L67120MH1993PLC070739 and PAN of our Company is AAACC2069E. Our Company is also registered with RBI as Systemically Important non-deposit taking Non-Banking Finance Company with registration no. No. 13.00325. For further details about our Company, see "History and Certain Other Corporate Matters" on page 87)

Registered Office: 4th Floor, Tower 3, Equinox Business Park, Off BKC, LBS Road, Kurla (West), Mumbai - 400 070, Maharashtra, India

Tel.: +91 22 4891 8686

Website: www.ugrocapital.com; E-mail: cs@ugrocapital.com

Company Secretary & Compliance Officer: Ms. Namrata Sajnani, Tel.: +91 22 4891 8686; E-mail:cs@ugrocapital.com

Chief Financial Officer: Amit Gupta; Tel.: +91 22 4891 8686; E-mail:amit.gupta@ugrocapital.com

Statutory Auditor: M S K A & Associates, Chartered Accountants, 602, Floor 6, Raheja Titanium, Western Express Highway, Geetanjali, Railway Colony, Ram Nagar,

Goregaon (East), Mumbai - 400 063; Tel.: +91 22 6831 1600; E-mail:swapnilkale@mska.in, Contact Person: Mr. Swapnil Kale

PROMOTER OF OUR COMPANY: POSHIKA ADVISORY SERVICES LLP; Tel.: +91 124 4091 777; E-mail: snath@poshika.com

PUBLIC ISSUE BY U GRO CAPITAL LIMITED ("COMPANY" OR THE "ISSUER") OF RATED, SECURED, SENIOR, LISTED, TRANSFERABLE, REDEEMABLE, NON- CONVERTIBLE DEBENTURES OF FACE VALUE 1000 EACH ("NCDS") FOR AN AMOUNT UPTO ₹ 5,000 LAKHS, HEREINAFTER REFERRED TO AS "BASE ISSUE

SIZE" WITH AN OPTION TO RETAIN OVER-SUBSCRIPTION UPTO ₹ 5,000 LAKHS, AGGREGATING UP TO ₹ 10,000 LAKHS, HEREINAFTER REFERRED TO AS THE "OVERALL ISSUE SIZE" (COLLECTIVELY THE "ISSUE"). THE ISSUE IS BEING MADE PURSUANT TO THE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF NON-CONVERTIBLE SECURITIES) REGULATIONS, 2021, AS AMENDED (THE "SEBI NCS REGULATIONS"), THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER, AS AMENDED AND THE SEBI OPERATIONAL CIRCULAR DATED AUGUST 10, 2021 AS AMENDED. THE ISSUE IS NOT PROPOSED TO BE UNDERWRITTEN.

GENERAL RISK

Investment in NCDs involve a degree of risk and investors should not invest any funds in such securities unless they can afford to take the risk attached to such investments. Investors are advised to take an informed decision and to read the risk factors carefully before investing in this offering. For taking an investment decision, investors must rely on their examination of the issue including the risks involved in it. Specific attention of investors is invited to statement of "Risk Factors" on page 13 of this Draft Prospectus. These risks are not, and are not intended to be, a complete list of all risks and considerations relevant to the NCDs or investor's decision to purchase such securities."

ISSUER'S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Draft Prospectus is true and correct in all material aspects and is not misleading, that the opinions and intentions expressed herein are honestly stated and that there are no other facts, the omission of which makes this Draft Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading.

COUPON RATE, COUPON PAYMENT FREQUENCY, REDEMPTION DATE, REDEMPTION AMOUNT & ELIGIBLE INVESTORS

For details relating to coupon rate, coupon payment frequency, redemption date, redemption amount & eligible investors of the NCDs, please refer to "Issue Structure" on page 156.

CREDIT RATING

Acuite Ratings and Research Limited

CRISIL Ratings Limited

708, Lodha Supremus, Lodha iThink Techno Campus, Kanjurmarg

CRISIL House, Central Avenue, Hiranandani Business Park, Powai,

(East), Mumbai - 400 042

Mumbai 400 076

Tel: +91 22 4929 4000; E-mail: chitra.mohan@acuite.in; Contact

Tel: +91 -224040 5800; E-mail: crisilratingdesk@crisil.com;

Person: Chitra Mohan

Contact Person: Krishnan Sitaraman

The NCDs proposed to be issued under the Issue have been rated "ACUITE A+ (read as ACUITE A plus) (Outlook: Stable)" for an amount of ₹ 20,000 lakhs by Acuite Ratings and Research Limited vide their rating letter dated May 19, 2022, revalidated as on July 11, 2022 and July 27, 2022 and press release for rating rationale dated May 19, 2022 and "CRISIL A- (read as CRISIL A minus) (Outlook: Stable)" for an amount of ₹ 25,000 lakhs by CRISIL Ratings Limited vide their rating letter dated May 26, 2022, (valid for 180 days) and press release for rating rationale dated May 26, 2022. The ratings provided by Acuite Ratings & Research Limited and CRISIL Ratings Limited are valid as on the date of this Draft Prospectus and shall remain valid on date of the Issue and Allotment of NCDs and the listing of the NCDs on Stock Exchanges. The ratings provided by Acuite Ratings & Research Limited and CRISIL Ratings Limited may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions. Please refer to Annexure II and Annexure III of this Draft Prospectus for the rationale and press release for the above ratings.

LISTING

The NCDs offered through this Draft Prospectus are proposed to be listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). NSE shall be the Designated Stock Exchange. Our Company has received an 'in-principle' approval from BSE and NSE vide their letters dated [●] and [●] respectively.

PUBLIC COMMENTS

The Draft Prospectus dated August 12, 2022 filed with the NSE and BSE, both on August 12, 2022, pursuant to the provisions of the SEBI NCS Regulations and to be kept open for public comments for a period of seven Working Days (i.e., until 5 p.m.) on [●].

LEAD MANAGERS TO THE ISSUE

REGISTRAR TO THE ISSUE

DEBENTURE TRUSTEE TO THE ISSUE *

Sundae Capital Advisors Private Limited

Tipsons Consultancy Services Private

Link Intime India Private Limited

IDBI Trusteeship Services Limited

Level 11, Platina, Plot No. C - 59

Limited

C 101, 247 Park B S Marg

Asian Building, Ground Floor, 17, R. Kamani Marg,

'G' Block, Bandra Kurla Complex

401, Sheraton House, Opp. Ketav Petrol

Vikhroli West, Mumbai - 400 083

Ballard Estate, Mumbai - 400 001

Bandra (East), Mumbai - 400 051

Pump, Polytechnic Road, Ambawadi,

Telephone: +91 22 4918 6200

Telephone: +91 22 4080 7000

Telephone: +91 22 6884 1336

Ahmedabad - 380015

Email

Id:

Email Id: itsl@idbitrustee.com/

E-mailId: ugroncd.2022@sundaecapital.com

Telephone: +91 79 6682 8047/6682 8120

ugrocapital.ncd3@linkintime.co.in

gaurav.jeswani@idbitrustee.com/

nvestor grievance e-mail Id:

E-mailId: neha.jain@tipsons.com

Contact person: Shanti

/ nikhil@idbitrustee.com

grievance.mb@sundaecapital.com

Investor grievance e-mail Id:

Gopalkrishnan

Investor grievance e-mail Id: itsl@idbitrustee.com

Contact person: Ashi Sood / Ridima Gulati

igr@tipsons.com

Website: www.linkintime.co.in

/ gaurav.jeswani@idbitrustee.com

Website: www.sundaecapital.com

Contact person: Neha Jain / Sandeep

SEBI registration number:

/nikhil@idbitrustee.com/ response@idbitrustee.com

SEBI registration number: INM000012494

Bhansali

INR000004058

Contact person: Mr. Nikhil Lohana/Mr. Gaurav

Website: www.tipsons.com

Jeswani

SEBI

registration

number:

Website: www.idbitrustee.com

INM000011849

SEBI registration number: IND000000460

ISSUE PROGRAMME **

Issue Opens on

[●], [●], 2022

Issue Closes on

[●], [●], 2022

  • IDBI Trusteeship Services Limited under Regulation 8 of SEBI NCS Regulations has by its letter dated August 10, 2022 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in the Draft Prospectus and in all the subsequent periodical communications sent to the holders of the NCDs issued pursuant to the Issue and the same is annexed as Annexure IV in this Draft Prospectus.
  • The Issue shall remain open for subscription on Working Days from 10 a.m. to 5 p.m. (Indian Standard Time) during the period indicated in the Prospectus, except that the Issue may close on such earlier date or extended date as may be decided by the Board of Directors of our Company or the Investment and Borrowing Committee, subject to relevant approvals. In the event of an early closure or extension of the Issue, our Company shall ensure that notice of the same is provided to the prospective investors through an advertisement in a daily national newspaper with wide circulation on or before such earlier or initial date of Issue closure. Applications through the UPI route will be accepted, subject to compliance by the investor with the eligibility criteria and due procedure for UPI applications prescribed by SEBI. On the Issue Closing Date, the Application Forms will be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) and uploaded until 5 p.m. or such extended time as may be permitted by the Stock Exchange. Further, pending mandate requests for bids placed on the last day of bidding will be validated by 5 PM on one Working Day post the Issue Closing Date. For further details please refer to "General Information" on page 31.
    A copy of the Prospectus shall be filed with the Registrar of Companies, Maharashtra at Mumbai in terms of Section 26 of Companies Act, 2013, along with the endorsed/certified copies of all requisite documents. For further details, please refer to "Material Contracts and Documents for Inspection" on page 250.

1

TABLE OF CONTENTS

DEFINITIONS AND ABBREVIATIONS

1

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET

10

DATA AND CURRENCY OF PRESENTATION

FORWARD LOOKING STATEMENTS

12

RISK FACTORS

13

GENERAL INFORMATION

31

CAPITAL STRUCTURE

40

OBJECTS OF THE ISSUE

47

STATEMENT OF TAX BENEFITS

50

INDUSTRY OVERVIEW

63

OUR BUSINESS

73

HISTORY AND CERTAIN CORPORATE MATTERS

87

KEY REGULATIONS AND POLICIES

90

OUR MANAGEMENT

104

OUR PROMOTER

115

FINANCIAL INFORMATION

119

KEY OPERATIONAL AND FINANCIAL PARAMETERS

120

FINANCIAL INDEBTEDNESS

122

OUTSTANDING LITIGATIONS

145

MATERIAL DEVELOPMENTS

155

ISSUE STRUCTURE

156

TERMS OF THE ISSUE

174

ISSUE PROCEDURE

189

OTHER REGULATORY AND STATUTORY DISCLOSURES

219

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

236

MATRIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

250

DECLARATION

252

ANNEXURE I - DAY COUNT CONVENTION

253

ANNEXURE II - ACUITE RATING LETTER AND RATIONALE

255

ANNEXURE III - CRISIL RATING LETTER AND RATIONALE

303

ANNEXURE IV - CONSENT OF THE DEBENTURE TRUSTEE

312

1

DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates, all references in this Draft Prospectus to "the Issuer", "our Company", "the Company" or "UCL" are to U GRO Capital Limited, a public limited company incorporated under the Companies Act, 1956, as amended and replaced from time to time, having its registered office at Equinox Business Park, Tower 3, Fourth Floor, LBS Road, Kurla Mumbai - 400 070, Maharashtra, India. Unless the context otherwise indicates, all references in this Draft Prospectus to "we" or "us" or "our" are to our Company. Unless the context otherwise indicates or implies, the following terms have the following meanings in this Draft Prospectus, and references to any legislation, act, regulation, rules, guidelines or policies shall be to such legislation, act, regulation, rules, guidelines or policies as amended from time to time.

COMPANY RELATED TERMS

Term

Description

"we" or "us" or "our"

Unless the context otherwise indicates or implies, refers to our Company.

₹ / Rs. / INR / Rupees /

The lawful currency of the Republic of India

Indian Rupees

Articles /

Articles

of

Articles of Association of our Company

Association / AoA

Assets

Liability

Assets Liability Committee as constituted by the Board of Directors

Committee or ALCO

Audit Committee

Audit committee as constituted by the Board of Directors

Board/

Board

of

Board of Directors of our Company or a duly constituted committee thereof

Directors

Company Secretary and

The company secretary and compliance officer of our Company, Ms. Namrata

Compliance Officer

Sajnani

Corporate

Social

Corporate Social Responsibility Committee as constituted by the Board of Directors

Responsibility

Committee

Director(s)

Director of our Company, unless otherwise specified

Equity Shares

Equity shares of our Company of face value of ₹10 each

Investment

and

Investment and Borrowing Committee as constituted by the Board of Directors

Borrowing Committee /

IBC

Independent Director

A Non-Executive, Independent Director as per the Companies Act, 2013 and the

SEBI LODR Regulations, who are currently on the Board of our Company

Key

Managerial

The Key Managerial Personnel of the Company appointed in accordance with the

Personnel

provisions of SEBI ICDR Regulations and the Companies Act, 2013

Memorandum

/

Memorandum of Association of our Company

Memorandum

of

Association / MoA

Nomination

and

Nomination and remuneration committee as constituted by the Board of Directors

Remuneration

Committee

Promoter

Poshika Advisory Services LLP

Promoter Group

Includes such persons and entities constituting the promoter group of our Company

pursuant to Regulation 2 of the SEBI ICDR Regulations

Reformatted

Financial

The Reformatted Statement of Assets and Liabilities of the Company as at March

Information

31, 2022, March 31, 2021 and March 31, 2020 and Reformatted Statement of Profit

and Loss, the Reformatted Statement of Cash Flows and Reformatted Statement of

change in equity for the year ended March 31, 2022, March 31, 2021 and March 31,

2020.

Risk

Management

Risk management committee as constituted by the Board of Directors

Committee

Registered Office

Equinox Business Park, Tower 3, Fourth Floor, LBS Road, Kurla Mumbai - 400

070, Maharashtra, India

RoC

Registrar of Companies, Maharashtra at Mumbai

1

Term

Description

Shareholder(s)

The holder(s) of Equity Shares of our Company, unless otherwise specified in the

context thereof

Stakeholders'

The stakeholders' relationship committee as constituted by the Board of Directors

Relationship Committee

Statutory Auditor

The current statutory auditors of our Company, M S K A & Associates, Chartered

Accountants

ISSUE RELATED TERMS

Term

Description

Abridged Prospectus

The memorandum containing the salient features of the Prospectus

Acknowledgement

The slip or document issued by the Designated Intermediary to an Applicant as proof

Slip

of registration of the Application Form

Acuité/ Acuite

Acuité Ratings & Research Limited

Allotment/

Allot/

The issue and allotment of the NCDs to successful Applicants pursuant to the Issue

Allotted

Allotment Advice

The communication sent to the Allottees conveying details of NCDs allotted to the

Allottees in accordance with the Basis of Allotment

Allottee(s)

The successful Applicant to whom the NCDs are Allotted, either in full or part,

pursuant to the Issue

Applicant/

Investor/

A person who applies for the issuance and Allotment of NCDs pursuant to the terms

ASBA Applicant

of this Draft Prospectus, the Prospectus, the Abridged Prospectus and the Application

Form through ASBA process or through UPI Mechanism

Application

An application to subscribe to the NCDs (whether physical or electronic) offered

pursuant to the Issue by submission of a valid Application Form and payment of the

Application Amount by any of the modes as prescribed under the Prospectus

Application Amount

The aggregate value of the NCDs applied for as indicated in the Application Form for

the Issue

Application

Form/

The form in terms of which the Applicant shall make an offer to subscribe to the

ASBA Form

NCDs through the ASBA process or through the UPI Mechanism and which will be

considered as the Application for Allotment of NCDs in terms of the Prospectus

"ASBA"

or

An application (whether physical or electronic) to subscribe to the NCDs offered

"Application

pursuant to the Issue by submission of a valid Application Form and authorising an

Supported by Blocked

SCSB to block the Application Amount in the ASBA Account or to block the

Amount" or

"ASBA

Application Amount using the UPI Mechanism, where the Bid Amount will be

Application"

blocked upon acceptance of UPI Mandate Request by retail individual investors

which will be considered as the application for Allotment in terms of the Prospectus

ASBA Account

A bank account maintained by an ASBA Bidder with an SCSB, as specified in the

ASBA Form submitted by ASBA Applicants for blocking the Bid Amount mentioned

in the ASBA Form and will include a bank account of a retail individual investor

linked with UPI, for retail individual investors submitting application value upto ₹

5,00,000

ASBA Circular

Circular no. CIR/DDHS/P/121/2018 issued by SEBI on August 16, 2018

Banker(s) to the Issue

Collectively, the Public Issue Account Bank, Sponsor Bank and the Refund Bank

Base Issue Size

₹ 5,000 lakhs

Basis of Allotment

The basis on which NCDs will be allotted to successful Applicants under the Issue

and which is described in "Issue Procedure" on page 189.

Bidding Centres

Centres at which the Designated Intermediaries shall accept the Application Forms,

i.e., Designated Branches of SCSB, Specified Locations for Members of the

Syndicate, Broker Centres for Registered Brokers, Designated RTA Location for

RTA and Designated CDP Locations for CDPs

Broker Centres

Broker Centres notified by the Stock Exchanges where Applicants can submit the

ASBA Forms to a Registered Broker. The details of such Broker Centres, along with

the names and contact details of the Trading Members are available on the website of

the Stock Exchanges at www.bseindia.comand www.nseindia.com

BSE

BSE Limited

2

Term

Description

Category

I

- •

Public financial institutions, scheduled commercial banks, and Indian

Institutional Investors

multilateral and bilateral development financial institutions which are authorised

to invest in the NCDs;

  • Provident funds and pension funds with minimum corpus of ₹25 crore, and superannuation funds and gratuity funds, which are authorised to invest in the NCDs;
  • Alternative Investment Funds subject to investment conditions applicable to them under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, as amended;
  • Resident Venture Capital Funds registered with SEBI;
  • Insurance Companies registered with IRDA;
  • State industrial development corporations;
  • Insurance funds set up and managed by the army, navy, or air force of the Union of India;
  • Insurance funds set up and managed by the Department of Posts, the Union of India;
  • National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India;
  • Systemically important non-banking financial companies being non-banking financial companies registered with the Reserve Bank of India and having a net worth of more than ₹ 50,000 Lakhs as per its last audited financial statements; and
  • Mutual Funds registered with SEBI

Category II - Non-

• Companies within the meaning of Section 2(20) of the Companies Act, 2013;

Institutional Investors

• Statutory bodies/ corporations and societies registered under the applicable laws

in India and authorised to invest in the NCDs;

• Co-operative banks and regional rural banks;

• Public/private charitable/ religious trusts which are authorised to invest in the

NCDs;

• Scientific and/or industrial research organisations, which are authorized to invest

in the NCDs;

• Partnership firms in the name of the partners;

• Limited liability partnerships formed and registered under the provisions of the

Limited Liability Partnership Act, 2008 (No. 6 of 2009);

• Association of Persons; and

• Any other incorporated and/ or unincorporated body of persons

Category

III

- High

High Net-worth individuals which include Resident Indian individuals or Hindu

Net-Worth Individuals

Undivided Families through the Karta applying for an amount aggregating to above

₹ 10 Lakh across all series of NCDs in Issue

Category

IV

- Retail

Resident Indian individuals or HUFs applying through the Karta, for NCDs for an

Individual Investors

amount aggregating up to and including ₹ 10 Lakh, across all series of NCDs in the

Issue and shall include Retail Individual Investors, who have submitted bid for an

amount not more than ₹ 500,000 in any of the bidding options in the Issue (including

HUFs applying through their Karta and does not include NRIs) through UPI

Mechanism

Client ID

Client identification number maintained with one of the Depositories in relation to the

demat account

CDP

/

Collecting

A depository participant, as defined under the Depositories Act, 1996, as amended,

Depository Participant

and registered under Section 12(1A) of the SEBI Act and who is eligible to procure

Applications at the Designated CDP Locations in terms of the SEBI Operational

Circular

Collecting

Registrar

Registrar and share transfer agents registered with SEBI and eligible to procure

and

Share

Transfer

Applications, at the Designated RTA Locations

Agents or CRTAs

Coupon / Interest Rate

The aggregate rate of interest payable in connection with the NCDs in accordance

with this Draft Prospectus. Please see the section titled "Issue Structure" on page 156.

3

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Ugro Capital Ltd. published this content on 18 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 August 2022 03:53:06 UTC.