According to reports, the central bank has said that NBFCs should not disburse gold loans of more than Rs 20,000 crore in cash.
SI Reporter New Delhi
Shares of gold finance companies Muthot Finance and Manappuram Finance came under intense selling pressure on Thursday, May 9, after the Reserve Bank of India (RBI) warned against violating the Rs 20,000,000-crore cap on cash loan disbursements. It was done.
Muthoot Finance fell 8.8 per cent (Rs 1,510) and Manappuram Finance fell 8.3 per cent (Rs 165.15) in intraday trade on BSE. In contrast, the benchmark S&P BSE Sensex was down 488 points, or 0.66%, as of 10:25 am.
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On Wednesday, the central bank referred to the provisions of Section 269SS of the Income Tax Act, 1961, which states that individuals cannot take loans exceeding Rs 20,000 in cash.
According to reports, global brokerage firm Morgan Stanley believes that non-banking financial companies (NBFCs) will have to make operational changes, leading to “temporary financial impact.”
“As of the end of December 2023, gold loans accounted for 84% of Muthot Finance’s assets under management (AUM) and 51% of Manappuram Finance.In the case of Manappuram Finance, 40% of expenditure was in cash. Therefore, there is a logical case that Manappuram stock will perform better than Muthot Finance in the short term,'' the brokerage reportedly said.
Muthoot Finance, India's largest gold lending NBFC, posted a 19% year-on-year increase in total revenue to Rs 3,176 million at the end of the December quarter, while standalone net profit rose 14% to Rs 1,027 million. It was reported that it happened. (YoY comparison) base.
Loan outstanding stood at Rs 71,182 crore as against Rs 57,731 crore in the year-ago period, registering 23% year-on-year growth.
Meanwhile, Manappuram Finance's net profit for the quarter rose about 46% to 573 million rupees ($69 million), beating analysts' expectations of 535 million rupees.
Manappuram's total assets under management stood at Rs 44,000 crore as on December 31, up from Rs 39,000 crore in the previous quarter, driven primarily by microfinance and vehicle finance businesses.
