While not comparable, take the case of Suzlon Energy. Stock hovered around 5-10 rs for years/ almost a decade. It was all in the hands of retail investors only. No institution, mutual fund were present. And retail was mocked for buying a company which is struggling. All changed within a year in FY23. The larger point I am trying to drive is all the analyses we see is post facto. Good fundamental performance changes all stories and as long term investors our endeavour should only be to keep finding signs of improving fundamentals. Rest all is for news articles.
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If stock price does not appreciate in a 1-2 year timeframe then it is obvious that retail investor starts getting frustrated. This is due to his limited capital available with him. What should be the mindframe for the long term investor to hold for 10 years without any appreciation in capital?
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Unfortunately, now a days, Narrative is highly mis-used word be it in national politics or investing world. When we don’t like something, often it is called as Narrative by others.
We as an investor must look at the actions of management. If Manappuram has been underperforming vs its peers like (Muthoot, IIFL, other NBFCs etc.) then there must be reason to investigate and ask not just few but millions of questions to management - specially when the same management is promoter also.
Mr. VP Nandkumar don’t have any succession plan, his kids are not interested in business.
Unethically, in personal capacity also he bought shares in Asirvaad along side listed Manappuram (ideally if VP Nandakumar got an opportunity, every other shareholders must have got the same opportunity).
Look at the skillset & capabilities of Management personal deployed in Asirvaad vs that of listed peer MFIs (for Ex CreditAccess Grameen etc.) - and we will see the difference.
Similarly, for Home Finance, have a look at Management personal of listed peers - and we will have reasons why those peers are above 2 times Book value and why manappuram is at discount.
For an investor, returns matter. It’s the bread & butter for investor to remian invested in a listed stock.
For Management, its their Salary (and other disclosed/undisclosed perks).
I remember, there was an FPI investor " Quinag Acquisition (Fpi) Ltd", who invested in Manappuram for almost 5 years, but in USD terms hardly they made any return, unfortunately in Sep 2023 querter they exited just before filing of IPO papers of Asirvaad.
1st Disc: Invested from last 5+ years, and looking to start liquidate position gradually once 200+. Now it’s not much of a return in Manappuram, but less trust in VP Nandakumar.
2nd Disc: View’s is subject to change in case change in promoter either because of friendly sell down or hostile takeover.
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Agree on the management part.
The 10-year example is undoubtedly an extreme case and is not intended to be seen as a virtue. If the fundamentals are neither convincing now nor expected to improve in the future, holding on to hope serves no purpose.
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I don’t see selling above 200 is very good decision. Let wait for MFI sector to take uptrend, that will be the best time to sell. Any news from bain capital in meanwhile will prove cherry on top.
Disclaimer: buying from 89 levels and will remain invested till the cycle turns.
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@thakurvi thanks for your inputs. At my end Manappuram has become almost 33% of portfolio 
due to consistent buying in last 5 years at all levels - partially because of its relative cheap valuation - partially because of knowing the fact that lending against gold is one of the safest mode of lending (other than pure Housing Finance).
However, now want to diversify in other such companies as well - where there is growth in industry as well as promoters have fire in belly to grow business either themselves or through high caliber operating professionals.
For Sure, a new promoter like Bain Capital or some other business house (like IIFL, Aditya Birla Capital etc. buying out VP Nandkumar) will be a main reason to stay invested in Manappuram for years to come.
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such failure on customer verification and lose system of customer database management is matter of concern, Customer data is very critical resource for any company, since there are multiple codes for single customer, how they will leverage the data. this shows lack of management risk management and strategic thinking.
This is a common problem in almost every financial institution, most of them would be old customers, its more prevalent in the industry then you may think (even in SBI, PSB etc, probably in big 4 banks too)
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yes I agree, but pan verification gaps and getting fined by RBI is big, they are not able to resolved this till now and Navi is fast to resolve. (they are big and big organization need more time to resolve). I had multiple accounts in HDFC in 2009 and bank mapped them and i had to close one.
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