Progcap looks to raise $45 million equity capital in FY28

MSME fintech firm Progcap aims to raise up to $45 million (approximately Rs 425 crore) from share sales in FY28 to expand its lending business.

"We are planning a capital raise through equity dilution next financial year," Progcap cofounder Himanshu Chandra told PTI.

It would be through private placement of shares, and the quantum could be in the range of $40-45 million, depending on the valuation, he said.


"We have enough capital to take care of growth needs for the current financial year. We may look at dilution of equity next financial year," he said, adding that the dilution would be in the single digit.

The fintech firm, which obtained an NBFC licence in 2022, has been witnessing very high growth in MSME lending, especially wholesalers and retailers.

The fintech is currently present in 500 cities, Tier II, III and IV cities, with over 30,000 borrowers having an average ticket size of Rs 10 lakh.

The lending firm focuses on loans to retailers and wholesalers across 10 industries, like consumer durables, two-wheelers, FMCG, and agriculture, and has 128 anchor brand partnerships.

Explaining the uniqueness of the firm, he said, "Unlike traditional fintechs that serve salaried, urban consumers, Progcap designs inclusive financial solutions for India's 60 million retail backbone, basically MSMEs in Tier II to Tier IV towns".

The NBFC operates a proprietary, tech-led co-lending platform, designed to deliver capital and credit intelligence across India's most complex and distributed MSME supply chains, he added.

Progcap has enabled more than Rs 10,000 crore of credit to women entrepreneurs through its ProgShakti initiative, which offers collateral-free loans of up to Rs 10 lakh, since its launch in March last year.

"Till date, we have enabled over Rs 10,000 crore of credit to women entrepreneurs through the ProgShakti initiative," Progcap, another co-founder, Pallavi Shrivastava said.

Women borrowers currently account for 17% of Progcap's overall portfolio, growing at 40% year-on-year, with almost 90% of these entrepreneurs coming from Tier 2 and Tier 3 markets, she said.