Manappuram Finance Ltd, a leading gold loan financing company in India, witnessed a surge in its share price, rising over 4% as of 9:23 AM on January 9, 2025. The positive momentum follows a key regulatory relief granted to its subsidiary, Asirvad Micro Finance, by the Reserve Bank of India (RBI). This development marks a significant turning point for the company and its investors.
In October 2024, the RBI imposed sanctions on Asirvad Micro Finance, citing concerns over its pricing policies. These restrictions curtailed the disbursement of loans, leading to operational challenges for the subsidiary. However, following detailed submissions by the company, the RBI lifted these sanctions on January 8, 2025.
This regulatory clearance demonstrates Asirvad’s commitment to adhering to the RBI’s guidelines and reinforces its credibility in the financial services sector.
Manappuram Finance acquired Asirvad Micro Finance in 2015. Since then, the subsidiary has become a crucial component of the parent company’s portfolio, contributing 25% to its total Assets Under Management (AUM). The relief granted by the RBI is expected to stabilise Asirvad’s operations and positively impact Manappuram’s overall business performance.
Despite the regulatory relief, Manappuram Finance’s stock remains in the Futures & Options (F&O) ban list. This means no new derivative positions can be created, limiting trading activity. Notably, the stock has been in the ban for most of December and January’s F&O series.
The share price trajectory of Manappuram Finance reflects the impact of the RBI’s sanctions. Before the restrictions were imposed, the stock closed at ₹180.11 on October 16, 2024. However, it plunged by over 13% to ₹138.35 on October 23. The stock has since recovered, closing at ₹180.11 on January 8, 2025, coinciding with the closing price of October 16, 2024.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jan 9, 2025, 2:15 PM IST
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