Manappuram Finance slips 4% after 10% equity change hands via block deal

Shares of Manappuram Finance slipped 4 per cent to Rs 140 on the BSE in Thursday’s intra-day trade after 10 per cent equity of the company changed hands.

At 09:15 am; around 88.4 million shares representing 10.44 per cent of total equity of Manappuram Finance changed hands on the BSE, the exchange data shows. The names of the buyers and sellers were not ascertained immediately.

As on June 30, 2023, Quinag Acquisition (Fpi) Ltd held 83.78 million shares or 9.9 per cent stake in the non banking finance company, the shareholding pattern data shows.

At 09:25 AM; the stock was quoting 3 per cent lower at Rs 142, as compared to 0.51 per cent rise in the S&P BSE Sensex. A combined 129 million equity shares changed hands on the NSE and BSE, the data shows.

In past six months, Manappuram Finance has outperformed the market by surging nearly 40 per cent, as against 10.7 per cent rise in the benchmark index.

Analysts at Motilal Oswal Financial Services believe that Manappuram Finance will be able to demonstrate the guided recovery in gold loan yields to ~22 per cent and deliver a healthy gold loan growth of ~12 per cent (which will be aided by higher gold prices as well). This will give credence to the management attribution of gold loan growth to lesser aggression from banks and return of the core gold NBFC customers to the gold-lending fold.

Management has demonstrated that it will not pursue loan growth at the cost of a compression in spreads and this we believe will continue to be a driver for higher profitability. For a stronger re-rating in the valuation multiples based on business fundamentals, it will have to demonstrate the sustainability of decent gold loan growth without the associated trade-offs with margin/spreads, the brokerage firm said in June quarter result update.