Manappuram Finance shares plunge over 7% as SEBI puts Asirvad IPO on hold
Manappuram Finance plunged 7.4% to Rs 163.4 in Wednesday's trade on BSE after the market regulator Securities and Exchange Board of India (SEBI) put the IPO of its arm Asirvad Microfinance on hold.
The delay in the IPO represents a blow to Manappuram Finance, which had raised its stake in Ashirwad Microfinance in June 2022, acquiring a majority stake as part of its broader diversification strategy.
Asirvad Microfinance had filed a draft red herring prospectus (DRHP) with SEBI to raise Rs 1,500 crore from the public back in October last year.
At 11.22 am, the scrip was trading 4.9% lower at Rs 167.9 on BSE. However, in the last year, the stock has surged nearly 40%.
In Q2 FY24, Manappuram Finance reported a 37% increase in consolidated net profit to Rs 561 crore.
The non-banking finance company, primarily in gold loans, had posted a net profit of Rs 410 crore in the same quarter a year ago.
Its total income rose to Rs 2,174 crore in the July-September quarter from Rs 1,714 crore in the same period of the previous fiscal. On the asset quality front, the lender's gross non-performing assets (NPAs) improved to 1.6% of the gross advances at the end of September 2023 from 2% in the year-ago period.
As per Trendlyne data, the target price of the stock is Rs 185, an upside of 10% from the current market prices.
The consensus recommendation from 14 analysts for the stock is a 'Buy'.
Technically, the stock's day RSI (14) is at 60.2. The RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed.
MACD is at 4.7, which is above its Center Line, but below signal line. Shares of Manappuram Finance are also trading higher than the 50-day, 100-day, 150-day, and 200-day moving averages.
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