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Kerala-based Manappuram Finance stock plunged 19.94% today and remained there till the close of trade as investors raised apprehensions over the company's gold loan business.
The company's stock on the Bombay Stock Exchange (BSE) was locked in the lower circuit at Rs 27.70. Its previous day's close stood at Rs 34.60.
Further, Manappuram Finance also informed BSE that the Director of the Company A. R. Sankaranarayanan who was the Chairman of the Remuneration Committee, resigned from the Board.
An email to this effect was sent by Sankaranarayanan to the company dated March 14, 2013, stated the company is a release sent to the BSE.
Fellow competitor Muthoot Finance too suffered a dip of 9.59% on the National Stock Exchange with its stock closing at Rs 186.20 as against its previous day's close of Rs 205.95.
The research house Ambit in a report stated since prices of gold fell by five% over the last two months, the quantum of interest income reversal could increase as against earlier guidance given by the management.
Further, on some portions of the loan portfolio originated in November-December 2011, the company seems likely to have to stop booking income during the current quarter as the collateral value associated with these loans would be less than principal plus accrued interest, Ambit added.
The company posted 48% dip in net profit for the third quarter which was announced last month. The company registered a net profit of Rs 84.38 crore for quarter ended December 31, 2012 as compared to Rs 161.37 crore of the previous year same quarter.
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