Muthoot Finance and Manappuram Finance tank as gold prices dip

Muthoot Finance has tanked 17% to Rs 126, while Manappuram Finance has dipped 10% to Rs 17.45 on BSE.

Shares of companies such as Muthoot Finance and Manappuram Finance have tanked up to 17% in early morning deals after the prices of the yellow metal fell 3.5% on Saturday.

“The Reserve Bank of India has moved into a high-alert mode and will call for information from gold loan companies and provide directions to those with high loan-to-value ratio,” the Times of India report suggests.

Meanwhile, domestic gold price has declined 14.2% from its record high of Rs 32,500 per 10 grams in end-November 2012 and trends in the futures market indicate that prices may fall further.

Among the individual stocks, Muthoot Finance has tanked 17% to Rs 126, while Manappuram Finance has dipped 10% to Rs 17.45 on the Bombay Stock Exchange.