10-Jan-2024
2 mins read
Manappuram Finance witnessed a significant drop in its stock value, plunging 7.5% in the early trading hours of January 10. This downward trend was a direct response to the Securities and Exchange Board of India’s (SEBI) recent decision to halt the initial public offering (IPO) of its subsidiary, Asirvad Micro Finance.
A Setback for Asirvad’s Market Entry
Asirvad Micro Finance, which had plans to raise Rs 1,500 crore through its public offering, submitted its draft red herring prospectus (DRHP) in October. However, SEBI’s move to put the IPO on hold has now postponed the listing process of the microfinance company, causing market apprehension.
Manappuram’s Strategic Investment Journey
Manappuram Finance’s involvement with Asirvad MicroFinance dates back to February 2015, when it acquired a 71 per cent stake, later increasing it to 95 per cent in June 2022. This acquisition was a part of Manappuram’s diversification strategy. The remaining stake in Asirvad is held by its founder.
Market Reactions and Trading Volumes
Following the announcement, the stock price of Manappuram Finance was observed at Rs 168.40 on the NSE at 9.59 am, with a notable increase in trading volumes. The trading session saw around one crore shares being transacted, surpassing the previous session’s 77 lakh shares, highlighting the market’s reactive nature to the news.