With a market capitalization of Rs 8,781 crores, Manappuram Finance Limited’s shares tanked around 13 percent today and currently trade at Rs 103.40. In the last 5 trading sessions, the stock has lost about 19 percent of the stakeholder’s wealth.
Such stock movements are observed after a recent development took place pertaining to search operations by the Enforcement Directorate (ED).
According to news reports, ED froze assets of the MD and CEO, Mr. VP Nandakumar which is roughly worth Rs 143 crores in a money laundering case. The ED mentioned that the proceeds from the above were put off to other sources by the CEO including immovable properties in his own, spouse’s & children’s name, and into the shares of the company.
Manappuram Finance Limited, NBFC based in India, is engaged in the business of providing microfinance, gold loans, commercial vehicle loans, and housing loans. Its product portfolio includes money transfers, SME loans, foreign exchange, etc.
The company manages its business operations through various segments, one of which is the ‘Microfinance Gold loan’. Maximum revenue for the company is generated from Gold loans and other segments.
Having a quick glance at the financials of the company, the revenues stood at Rs 1,696 crores during Q2 v/s Rs 1,714 crores in Q3. On a contrasting note, the net profit numbers took a shift from Rs 410 crores to Rs 394 crores during the same period.
Coming onto the profitability metrics, the basic ones such as the return on equity (ROE) as well as the return on capital employed (ROCE) with the former moving down from 26.58 percent during FY20-21 to 16.98 percent in FY21-22 and the latter decreasing from 15.55 percent to 12.14 percent keeping the timeframe the same.
According to the latest shareholding data available for the March quarter, promoters of the company hold a 35.2 percent stake, and Foreign Institutional Investors (FIIs) hold a 30.17 percent stake in the company.
Written by Amit Madnani
