Manappuram Finance’s long term weekly chart (10 year)
Sorry, what does this chart mean? a 10 Yr breakout? what are the implications if yes?
It’s basically a breakout of the stock’s price from a flat trading range (this makes better sense from a one-year perspective, during which period the stock has been trading roughly between 90 and 110). The breakout is probably a sign that the market is ready to bid up the stock higher (towards its fair value).
KPMG report predicts that value of organised gold loan market in India will grow to Rs 310100 crore by 2020 at a three year compounded annual growth rate (CAGR) of 13.7 per cent.
Shareholding pattern is out a while back and DSP Black Rock Micro Cap fund has increased stake from 1.38 to 2.22. Dolly Khanna’s stake remains unchanged.
AIM/Hedge funds have increased stake, Quinag increased and no. of shareholders declined by 3k. All point to further positive consolidation.
Board meeting on 23rd to discuss investment proposals. Al though the disclosure doesn’t explicitly clarify on the term ‘investment proposals’. I am assuming it is related to someone buying a stake or taking over the company. Also the board meeting is happening in Mumbai rather than Kerala.
The only problem is I am not clear if Manappuram going to invest or other way round? THere are some board meeting that day and prominent ones include Edelweiss and RBL. I think operationwise RBL is a perfect fit while Edelweiss has different client base compared with Mamnappuram.
Disc - Invested in Mana and Edel
They said “investment proposals”. I think this will be some entities willing to invest in mana. Even i thought it cd be mana investing in some other company (inorganic), but more than one proposal makes me bend towards more than one company buying stake in mf. All speculative, and i can be completely wrong.
after denying any talks repeatedly, it will be a kind of somersault to announce being acquired. And the promoters clearly believe that the stock is undervalued. It looks likely that they are acquiring another company to deploy excess capital or some big investor (Piramal kind etc ) want to invest by taking large (~10-20%) stake. This could result in re-rating of the stock and eventual exit of the promoters later on. I have always believed that running a gold finance company is not easy. Just my side of speculation.
Looks like two big triggers this month
Tomorrow’s investment poroposal
And AUM growth this quarter
To me this seems to be the most likely scenario. They probably have some investment proposals from more than one entities, which they might be discussing and deciding over in the meeting on Tuesday. They might not be selling the controlling stake just yet but a small stake as you said.
Yes, mgmt has been denying the stake sale rumors but poeple mostly remain tight lipped till the deal is struck. If they are getting a good valuation, i think mgmt will be prudent.
Another possibility could be offloading part of business like micro finance to some bank considering latest structural development , deals n outlook
Is anyone attending the meet
Where can we get the meeting updates from
Authorised Mr Nandakumar to initiate further discussions on behalf of the company on investment opportunities available with the company.
Unfortunately, the announcement is a bit difficult to understand. Still not clear - whether this means the company is looking to sell part of its stake or is it looking to acquire another business as an inorganic growth opportunity.
I may be wrong, but I think it is kind of straight forward that Manappuram is exploring new opportunities to invest further as it is one of their stated objectives to diversify away from gold loan financing. If someone else is investing in Manappuram, they would have notified as divestment options rather than investment opportunities!
Looks like will get rerated sooner or later
One article re rates the company?
Not about the article
It’s about the performance and valuations discrepancy
For gold loans, which are adequately collateralised, why does the interest rate be northwards of 20%? Even mincrofinance loans without any collateral are being given at this rate.