Exclusive: NeoGrowth raises debt from UTI International

MSME-focused digital lender NeoGrowth has raised debt funding from UTI International Wealth Creator. This will be the second debt infusion in the Mumbai-based company in the ongoing calendar year.

NeoGrowth's board has approved the issuance and allotment of up to 4,200 non-convertible debentures (NCDs) to raise up to Rs 42 crore (approx $5 million), its regulatory filings sourced from the RoC shows.

These NCDs will carry an interest rate of 11.7% per annum. UTI International Wealth Creator 4 is a debt fund managed by Mumbai-based UTI Asset Management Company.

The debt infusion in the company has come at a time when NeoGrowth is eyeing to raise Rs 500 crore growth capital through private equity investment. The firm managed assets worth Rs 2,750 crore by the end of the last fiscal year, and aims to close FY25 with Rs 4,000 crore AUM.

NeoGrowth, an NBFC co-founded by Dhruv Khaitan and Piyush Khaitan, offers short-term unsecured loans to MSMEs, providing amounts of up to Rs 75 lakh with a tenure of up to 100 months.

To date, the company has raised approximately $138 million through a mix of equity and debt funding from investors including MicroVest, FMO, Omidyar Network, DFC, and others.

Neogrowth registered 57% growth in its gross revenue which spiked to Rs 601 crore in the fiscal year ending March 2024 from Rs 381 crore in FY23. Meanwhile, its profit before tax surged almost 4X to Rs 95 crore in the last fiscal year from Rs 24 crore in FY23.