Manappuram Finance shares slip nearly 20% in last few sessions – what should investors do?
![Manappuram Finance shares slip nearly 20% in last few sessions – what should investors do? Manappuram Finance shares slip nearly 20% in last few sessions – what should investors do?](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_850x478/public/2023/05/06/240730-stock-market-8.jpg?itok=rwU5BQfm&c=9000a8a8c2917b662891fd164833aa84)
Shares of Manappuram Finance – a Kerala-based gold financing company – were hammered for the last few sessions after the Enforcement Directorate (ED) on Thursday (May 4, 2023) said it recently conducted searches at six premises in Thrissur, Kerala.
The stock has declined nearly 20 per cent in the last three days from Rs 130 on May 2 to Rs 105 on May 5, 2023.
The Enforcement Directorate on Thursday said it has frozen assets worth Rs 143 crore of prominent Manappuram Finance’s managing director and chief executive officer VP Nandakumar after it conducted raids as part of a money laundering investigation.
Analysts’ Views
Choice Broking Executive Director Sumeet Bagadia, also a Zee Business panelist, said the Manappuram Finance shares are likely to witness a further fall of around 15-20 per cent until the negative news of ED raids doesn’t fade away, the stock is weak on charts after the recent correction.
He believes the counter has Rs 120 apiece important support at the higher side and may bounce back only after the ED raids news goes away. Bagadia suggests investors to ‘avoid’ the stock.
In line with Bagadia’s views, TradeSwift Director Sandee Jain, who is also a Zee Business market panelist, suggests investors stay away from ‘fresh buying’ and take a wait-and-watch position until this negative news of money laundering persists.
On the contrary, Jain believes that the stock may see a bounce back going forward on good books and the fundamental outlook of Manappuram Finance company.
About ED raids
The searches were conducted as part of an investigation under the PMLA into the allegations of money laundering from the illegal collection of deposits from the public, said a PTI report.
The ED searches resulted in the detection of evidence regarding money laundering and large-scale cash transactions in the form of public deposits, done by Nandakumar through his proprietary firm, Manappuram Agro Farms (MAGRO) without RBI approval.
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