Sunday, March 3, 2024
Google search engine
HomeBusinessM&M Financial tanks 14% as RBI bars third-party services for loan recovery

M&M Financial tanks 14% as RBI bars third-party services for loan recovery


Shares of Mahindra & Mahindra (M&M) Financial Services tanked 14 per cent to Rs 192.05 in Friday’s intra-day trade, after the Reserve Bank of India (RBI) directed the company to immediately cease any recovery or repossession activities via an outsource till further orders.

At 09:55 am; the stock traded 11 per cent lower at Rs 200 apiece, as compared to 0.78 per cent decline in the Nifty 50. A combined 20 million shares changed hands on the NSE and BSE.

“The action is based on certain material supervisory concerns observed in the said non-banking finance company (NBFC), with regard to the management of its outsourcing activities. However, the NBFC may continue to carry out recovery or repossession activities, through its own employees,” the said.

Meanwhile, the company said that they repossesses around 4,000 to 5,000 vehicles per month in daily course of business via third-party agencies as well as their own employees. That said, the company expects this number to go down temporarily to around 3,000 to 4,000 per month, as they implement the order with immediate effect.

“The company has not outsourced any collection activities in its vehicle finance business to any third-party agencies and therefore, the company does not expect any impact on the collections in this business,” the management added. CLICK HERE FOR STATEMENT

Given this, analysts at believe that the RBI’s order could impact recovery process of the company in the near-term and steer investor sentiments in negative direction.

Despite of Friday’s sharp decline, in the past six months, M&M Financial outperformed the market as it surged 25 per cent. In comparison, the Nifty 50 rose 1 per cent, during the same period. Earlier, the stock had hit a 52-week high of Rs 235 per share on September 15, 2022.


Source link

- Advertisment -
Google search engine

Most Popular

Recent Comments