New Delhi: Reserve Bank of India (RBI) has prohibited four non-banking financial companies (NBFCs), including Asirvad Micro Finance – a subsidiary of Manappuram Finance, from sanctioning or disbursing loans, effective from October 21, 2024. The other three NBFCs are Arohan Financial Services Limited, DMI Finance Private Limited and Navi Finserv Limited.
The central bank took the decision after it found discrepancy in the “Pricing Policy of these companies in terms of their Weighted Average Lending Rate (WALR) and the Interest Spread charged over their cost of funds, which are found to be excessive, not in adherence with the regulations, and to be not in conformity with the provisions laid down under Fair Practices Code issued by the Reserve Bank.”
Following the RBI decision, Mannapuram Finance share price dropped nearly 13 per cent and closed at 154.30 on October 17. Several brokerages downgraded the stock after the RBI action. Brokerage firm CLSA reduced the Mannapuram Finance share target price while Morgan Stanley downgraded its rating from overweight to equalweight and also reduced the target. Jefferies, which downgraded the stock to “hold” and cut its price target to Rs 167 on the stock.
Mannapuram Finnace is engaged in the business of providing Gold Loan, Online Gold Loan, Vehicle Loan, Two Wheeler Finance, Personal Loan(Secured), Micro Home Finance, Business Loan, Digital Personal Loan, Forex & Money Transfer, Healthcare Industry Loan, Small Scale Industries Finance, Restaurant Finance, Loan to Food Industry, School Finance, Corporate Loans, MAkash – Digital Wallet, Micro Credit Loan, Mahila Micro Credit Loan, Traders Micro Credit Loan
and other services.
In its Q2 Results 2024-25, Manappuram Finance reported a consolidated net profit of Rs 556.5
crore, a 11.7 percent increase compared to Rs 498 crore in Q1 FY24. The NBFC’s consolidated Assets Under Management (AUM) reached Rs 44,932 crore, while the standalone net profit for the quarter, excluding subsidiaries, was Rs 441 crore. Total consolidated operating income for the quarter was Rs 2,488 crore, a 23% increase from the same quarter last year. The company’s consolidated gold loan portfolio saw a 14.8% increase to Rs 23,647 crore compared to the first
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