Manappuram Finance, one of India's leading gold loan NBFCs, witnessed a remarkable surge of 6.4% in its stock price, closing at ₹191.50 apiece on the NSE on Thursday, January 9, 2025. This spike followed the Reserve Bank of India's (RBI) decision to lift supervisory restrictions on Asirvad Micro Finance Limited, a subsidiary of Manappuram Finance. The RBI also removed similar curbs on DMI Finance Private Limited, citing compliance with regulatory guidelines and revamped processes.
RBI's restrictions and their resolution
In October 2024, the RBI imposed sanctions on both Asirvad Micro Finance and DMI Finance, halting loan sanctions and disbursements due to concerns over pricing policies, including excessive Weighted Average Lending Rates (WALR). Since then, both companies have revamped their systems, ensuring fairness in loan pricing and adherence to regulatory norms.
The RBI, satisfied with these remedial measures, stated that both NBFCs had demonstrated commitment to compliance and a "fairness-first" approach. Asirvad Micro Finance's return to normal operations is expected to enhance Manappuram Finance's overall growth trajectory. This development has strengthened investor confidence, making it an opportune time to buy shares online in the company.
Strong Q2 performance and growth outlook
Manappuram Finance also reported a consolidated net profit of ₹571 crore for Q2 FY25, a 2% year-on-year increase, beating analysts' expectations. Its robust performance in the gold loan segment offset higher provisions, showcasing the resilience of its business model.
The surge in domestic gold prices during the quarter boosted loan growth, further solidifying Manappuram Finance's position as a leading player in the sector. Investors looking to expand their portfolios can consider this an ideal moment to buy shares online in gold-focused NBFCs like Manappuram Finance, given the sector's stability and growth potential.
Final outcome
Manappuram Finance's stock witnessed a significant surge following the RBI's decision to lift restrictions on its subsidiary, Asirvad Micro Finance. The move has reinforced investor confidence, with the stock price showing a sharp rise today, January 9, 2025.
At 11:35 AM, the stock was trading at ₹185.55 per share, reflecting a 3.05% increase from its previous close of ₹180.05. This uptick comes amid strong financial performance and improved compliance measures, boosting optimism around the company's growth potential.
Given the positive momentum, investors should closely monitor the Manappuram Finance stock price in the coming days and weeks to gauge its trajectory following this critical update. For those looking to diversify, this may be an opportune time to buy shares online.
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