Shares of Manappuram Finance fell sharply by 15% on October 18, hitting the lower circuit at ₹150.73 on the NSE, following a directive from the Reserve Bank of India (RBI). The central bank has instructed Asirvad Micro Finance Limited, a key subsidiary of Manappuram Finance, to stop sanctioning or disbursing loans from the close of business on October 21, 2024.
The order from RBI was issued in exercise of powers conferred under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, which empowered the central bank to direct a financial company to stop business in public interest. While announcing that it would extend full cooperation and support in the matter, the Company acknowledged that it was not divulging specific reasons for the said Order. But this sudden stopping of loan disbursals certainly raises a lot of questions regarding its impact on the business operations and financial health of Asirvad Micro Finance.
This surprise order has sparked an intense sell-off in Manappuram Finance as its stock mirrors the fears of investors in the future growth and revenue prospects of its microfinance subsidiary.
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Source: THBL
News Desk
