Manappuram Finance shares surged 4.05 per cent in Monday's trade to hit a high of Rs 209. The stock was last seen trading 2.27 per cent higher at Rs 205.40. At this price, it has climbed 7.34 per cent on a year-to-date (YTD) basis.
Today's rise in the share price came after it was reported that the Kerala-based firm is drawing close to a deal with American private investment firm Bain Capital. Bourses BSE and NSE have sought clarification from the shadow lender over the same. "The Exchange has sought clarification from Manappuram Finance Ltd on February 24, 2025, with reference to news appeared in https://economictimes.indiatimes.com/ dated February 24, 2025, quoting "Manappuram Finance shares surge 4% as Bain Capital nears $1 billion deal." The reply is awaited," a BSE filing stated.
Manappuram, in response, said, "We have taken note of the captioned news item, and confirm that currently there is no information which requires disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'). As a general matter, the Company, as part of its business strategy, explores various strategic / growth opportunities in the best interest of its stakeholders, from time to time."
Considering that the shares of the Company are freely traded on the stock exchanges, the Company will not be in a position to comment on the movement in its share price. The Company has promptly intimated the stock exchanges regarding all events and disclosed all information, that have a bearing on the operations/ performance of the Company, in accordance with Regulation 30 of the Listing Regulations as and when required, and will continue to do so in accordance with applicable law."
"With the embargo on the MFI subsidiary being lifted, Asirvad is expected to resume growth momentum, though in a calibrated manner. However, given the headwinds in the MFI business, the management does not intend to pursue aggressive growth in the portfolio and will look to cap its mix at 10-15 per cent. Manappuram will aim to achieve MFI book growth of 10-12 per cent over the medium term. In line with its strategy to pursue growth in secured businesses, it has also discontinued unsecured digital personal loans and unsecured MSME loans. We expect Manappuram to register a healthy 16 per cent CAGR AUM growth over FY25-27E," Axis Securities said.
"In Q3 FY25, asset quality deterioration was visible across segments. The company has taken a technical w/off of Rs 400 crore during the quarter. In the Vehicle Finance (VF) and Housing Loans (HL) segment, the company caters to bottom-of-the-pyramid customers, and the recent macro challenges have resulted in asset quality deterioration. On the brighter side, the company has seen an improvement in collection efficiency (CE) from Jan'25 onwards and expects asset quality to improve from Q4 FY25 onwards. The MFI headwinds have resulted in elevated credit costs and higher GNPAs in Asirvad. As a result, the company has taken corrective action by tightening underwriting processes, capping the number of lenders, and reducing the loan size. It expects an improvement to be visible in the coming 2-3 quarters," the brokerage also said.
"We revise our rating from 'HOLD' to 'BUY' on reasonable valuations and expectations of improved profitable growth over the medium term. Current TP (target price): Rs 220/share," it further stated.
Technically, the scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 56.45. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the company's stock has a price-to-equity (P/E) ratio of 9.46 against a price-to-book (P/B) value of 1.53. Earnings per share (EPS) stood at 21.23 with a return on equity (RoE) of 16.17.
As of December 2024, promoters held a 35.25 per cent stake in the company.