Posted by vishal on 2024-10-18 06:23:23 |
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Shares of Manappuram Finance Ltd plummeted by over 16% on Friday, following multiple downgrades and price target cuts by several brokerages. By 10:30 am, the company's shares were trading at Rs 148.75 on the Bombay Stock Exchange (BSE).
Asirvad Micro Finance, to halt the sanctioning and disbursal of loans. The RBI's action wasn't limited to Asirvad alone; three other Non-Banking Financial Companies (NBFCs) were also flagged for non-compliance in assessing household incomes and repayment obligations tied to their microfinance loans.
Brokerage houses responded swiftly to the RBI's move. CLSA, while maintaining its "outperform" rating on Manappuram, slashed its price target from Rs 240 to Rs 2001. In its note, CLSA pointed out that Asirvad accounts for 25% of Manappuram's overall Assets Under Management (AUM), leading them to cut profitability estimates.
The central bank's crackdown on Manappuram Finance's subsidiary Asirvad Microfinance led to brokerages scrambling to downgrade their ratings on the gold financier. The RBI's restrictions were part of a broader supervisory action against four NBFCs , including Asirvad Micro Finance, Arohan Financial Services, DMI Finance, and Navi Finserv.