Ugro Capital's 44% fall puts co-lending model under the scanner

Market pulse

From the investor's mind

Neuland Labs has demonstrably strengthened its working capital management even amidst a phase of significant expansion. The company has been effectively generating more cash and reducing debt, despite achieving 100% year-on-year growth. This indicates a robust financial discipline supporting its rapid business growth. Tijori highlights this often-overlooked point as crucial for understanding Neuland Labs' underlying financial health.

Word in the street

Ugro Capital Limited

Investors have been animatedly discussing Ugro Capital, which has seen its stock fall over 44 percent in the last year. Much of the debate centers on its co-lending business model. Some observers noted that the company previously recognized future cash flows as upfront profits, which helped expand its network without immediate cash returns. This has been described by some as acting like a securitization layer for larger banks. Now, the model appears to be shifting towards one where cash is received more slowly over time. The change has sparked conversations about whether the original co-lending strategy was a folly, and why the company does not simply sell its loan book to institutions with a lower cost of borrowing.

Yesterday's big moves

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