NBFC UGRO dismisses concerns raised by proxy advisory firm over its MD salary

MSME-focused NBFC UGRO on Thursday rejected concerns raised by a proxy advisory firm over the reappointment and salary compensation of vice chairman and managing director Shachindra Nath.

The proxy advisory firm advised its institutional investor clients to vote against the reappointment decision at the annual general meeting scheduled for May 29.

In its regulatory filing to the stock exchanges, UGRO said the compensation proposed for Nath was at or below market average, as independently confirmed by Aon, one of the world’s leading compensation consultancies, appointed by the company’s 100% independent Nomination and Remuneration Committee in April.

UGRO alleged that these proxy advisory firms routinely advise ‘against’ the appointment of managing directors of similar NBFCs.

In each case, the compensation was similar or higher, the shareholders rejected the advisory and the individuals involved remain in their positions today.

Also Read | UGRO Capital: Net profit rose 26% YoY to ₹51 crore; revenue increased 51% year over year

The most pressing concern of the proxy recommendation report was the proposed share price-linked variable compensation component, which the firm described as similar to cash-settled Stock Valuation Rights (SARs), which are prohibited for promoters under SEBI’s share-based employee rights regulations.

UGRO chairman Satyananda Mishra, former Information Commissioner of India, said in a statement that if the variable pay decision is upheld, any compensation determined will be independently compared with similar companies to align the founder’s interests with those of all shareholders.

It will be fair, market-referenced and never excessive; only harmony, never enrichment, he said.

“One fact deserves recognition: Nath voluntarily guaranteed ₹The company borrowed Rs 1,830 crore, without a single rupee of commission or fee, while building an institution that employs 2,500 professionals and serves 2,50,000 MSMEs across India. “This level of personal commitment is rare in corporate India,” he said.

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It is worth noting that in March and April 2026, when the governance debate was escalating, Nath’s promoter organization Poshika Financial Ecosystem Private Ltd acquired shares in the company through open market share purchase.

Poshika purchased 18,54,374 shares at prevailing market prices. ₹107.65 and ₹110.94 per share – approx investment ₹20 crore personal capital. The acquisitions increased the cumulative promoter stake to 2.88 percent of the company’s total diluted share capital.

Nath founded UGRO Capital in 2018, building it from a listed shell and enabling more than 2018 by transforming it into India’s first listed MSME-focused DataTech credit NBFC. ₹2,500 crore equity capital was raised in eight years.

The filing also stated that its own shares had been diluted to less than 3 percent as a direct result — dilution for construction purposes, not spin-off.

This promoter classification permanently exempts him from ESOPs, SARs and equity-linked long-term incentives that every similar professional medical doctor in India receives in addition to cash, it said.

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