Manappuram Finance shares slide 17% in 2 days. What brokerages say
Manappuram Finance slid 17% to Rs 145.50 in the last 2 trading sessions after the Reserve Bank of India (RBI) imposed restrictions on four NBFCs (including Manappuram’s subsidiary) citing material supervisory concerns.
The restrictions will be effective from October 21, 2024 on four NBFCs Asirvad Micro Finance (a subsidiary of Manappuram Finance), Arohan Financial Services, DMI Finance, and Navi Finserv.
Post the regulatory action, the stock of Manappuram attracted downgrades from various brokerages. Here is what they say:
Morgan Stanley: Equal-weight| Target price: Rs 170
Morgan Stanley has downgraded Manappuram Finance to Equal-weight from Overweight while cutting the target price to Rs 170 from Rs 262.
RBI's embargo on new business by Asirvad could hurt profits materially and for longer. The company could face a rise in funding costs and would have to support Asirvad with funding. A loan growth moderation could also be faced, however, tighter credit practices and higher provisioning are likely to give comfort to all stakeholders. Despite this and earnings cuts at the standalone entity, standalone valuation remains cheap. However, Morgan Stanley believes that the investor interest could take lo ..
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