NBFCs slump; Manappuram Finance, Bharat Financial down over 10%

Manappuram Finance, Can Fin Homes, Shriram City Union, Bharat Financial and Muthoot Finance were down over 10%.

Shares of non-banking financial companies (NBFCs) including micro finance institutions (MFIs) and housing finance companies (HFCs) witnessed selling pressure falling by upto 20% on BSE in intra-day trade extending their past three trading day’s decline after the government’s move to withdraw Rs 500 and Rs 1,000 notes.

Manappuram Finance, Can Fin Homes, Shriram City Union Finance, Bharat Financial Inclusion, Muthoot Finance, Capital First, JM Financial, GIC Housing Finance, Gruh Finance, Dewan Housing Finance (DHFL), Bajaj Finance and Bajaj Finserv were down 5% to 20% on the BSE.

“The recent move by Government of India to demonetize the Rs 500 and Rs 1,000 currency notes is expected to significantly deter the mailpractices supported by cash economy and fake currencies,” DHFL said in a statement.

“While the medium to long term benefits of this move to the economy at large and the real estate sector in particular are indisputable. DHFL expects some short term challenges. It is expected that cash-flows of the households, particularly the self-employed category, may be impacted for some time due to withdrawal of 86% of the currency from the system until normalcy is restored and business align themselves to the non-cash mode of payments including electronic payments. We expect that this transition may happen in next couple of months,” it added.

AK Prabhakar, Head of Research at IDBI Capital said the outlook for NBFC stocks will remain negative for one to two quarters.

“The business of NBFC companies has come under pressure as small businesses, that depend on these companies for funds, have been badly hit on account of demonetisation of Rs 500 and Rs 1000 notes,” he said.

“Companies like Shriram Finance, SKS Microfinance and Bajaj Finance will have major impact with change in spending habits. The shift towards banks, credit cards and payment banks may lead more correction in these stocks, going forward,” he added. LINK

COMPANY	LATEST	PREV CLOSE	LOSS(%)
SHRI.CITY UNION.	1718.95	2060.40	-16.57
MANAPPURAM FIN.	75.50	89.90	-16.02
BHARAT FINANCIAL	594.55	690.65	-13.91
CAN FIN HOMES	1372.00	1565.05	-12.34
GIC HOUSING FIN	256.60	291.30	-11.91
REPCO HOME FIN	525.00	594.45	-11.68
RELIGARE ENTERP.	237.25	268.55	-11.66
CHOLAMAN.INV.&FN	831.40	933.75	-10.96
CAPITAL FIRST	532.00	595.35	-10.64
JM FINANCIAL	63.55	71.00	-10.49
MUTHOOT FINANCE	305.45	339.90	-10.14
L&T FIN.HOLDINGS	85.85	94.90	-9.54
BAJAJ FIN.	781.35	857.85	-8.92
M & M FIN. SERV.	263.90	287.60	-8.24
EQUITAS HOLDINGS	149.00	161.95	-8.00
GRUH FINANCE	277.25	300.35	-7.69
LIC HOUSING FIN.	481.10	520.05	-7.49
MOTIL.OSWAL.FIN.	490.60	529.90	-7.42
MAGMA FINCORP	91.70	99.05	-7.42
EDELWEISS.FIN.	96.30	104.00	-7.40