Manappuram Finance Debuts In The Home Finance Arena
Waseem Ahmad / 13 Mar 2014
In a move to branch out, Manappuram Finance has entered into an agreement with Jaypee Hotels to acquire Milestone Home Finance Company. After the announcement, the stock of Manappuram Finance is trading at Rs 22.30, up by 1.13% on BSE.
The company has decided to diversify its business from providing just gold loan to enter the lucrative home loan segment. This step has been taken by the company keeping in mind the fluctuation in gold prices and also for providing a single product lending. It has planned to bring the gold loan down to 50% of the total lending by 2020, while the rest will be home loan finance.
Manappuram Finance is one of India's leading NBFCs providing financial services, including gold loan, foreign exchange services and remittances. The company has a strong presence across India with 2320 branches in south, 360 in west, 447 in north and 168 branches in east as of March 31, 2013.The company did not perform well in the last quarter as it recorded a decrease in its bottomline by 16% to Rs 71 crore in Q3FY14 from Rs. 84 crore in Q3FY13. The topline has also dropped by 9% on a yearly basis. The net interest margin of the company has improved to 12.37% in Q3FY14 from 10.16% in Q3FY13 due to reduction in interest cost as a result of raising lower cost of fund from money markets.
The positive is that the company has been able to control its gross NPAs during the quarter as it stood at 0.90% of total borrowing in Q3FY14 against 0.90% of Q3FY13. Book value per share of the company has dropped to Rs 29.97 in December quarter FY14 against Rs 32.47 per share in Q3FY13.After the announcement of the deal this morning, the stock is trading at Rs 22.30, up by 1.13% on BSE. At the CMP, the stock is trading at a price to book value of 0.74x.
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