For a company management which likes doing PR on overdrive, it is very strange that they didn’t feel the need to tell the investor base the reason why they skipped the quarterly call. Their IR team had the time to prepare and send a doc yesterday what the Budget had for MSME’s, but hasn’t yet replied to my query on why no quarterly call. If there was ever a need for a call, it was now when suddenly there was negligible growth in AUM.
It is Mr. Nath who loves bringing Bajaj Finance into the picture while showing us the path to the pot of gold at the end of the rainbow, lets not get too excited. BF executed very well over many years, they were not capital constrained, and RBI had not put any speed breakers on Consumer lending during their initial growth phase.
Right now, interest rates are not our main problem, as its not very high by Indian standards.
IMHO Issue is
UC is slightly capital constrained. Not saying that they have no money, but they dont have ample amount to achieve 20K AUM at the original planned timeline, I feel. UC doesn’t have the backing of a big biz house, RBI has also asked Banks to go slow on lending to NBFCs and UC has yet to prove itself over a credit cycle that PE/Family offices will right big cheques to them when asked for.
Also, MSME lending has unique characteristics. It needs special categorization/handling like we have for HFC’s. RBI/Finance Ministry needs to do something about it, if we are to fill the huge credit gap.
What best UC can do is operate within the constraints till it catches some tailwind and be upfront about any issues rather than going MIA at the first indication of (possible) issue.
Disc: Invested – 2nd biggest holding. It has been a drag on PF.
PS: Had the share price been 30-40% higher, we wouldn’t be pontificating here. The Mgmt may have been considered as faultless. Share price dictates the sentiments for most investors.
| Subscribe To Our Free Newsletter |
