IIFL Finance share: After the RBI action on NBFC company IIFL Finance, there is a continuous huge selloff in the shares of the company. The company’s shares hit lower circuit in early trading on Wednesday. IIFL Finance shares fell by 20 per cent or Rs 95.70 to Rs 382.80. This is the 52 week low level of this share. The 52 week high of this share is Rs 704.20. The market cap of the company has fallen to Rs 14,603.17 crore on BSE.
Shares fell 35% in 32 days
Even on Tuesday, the stock had fallen 20 percent in early trade. Earlier on Monday also, IIFL shares had fallen by 20 percent. Reserve Bank of India has stopped IIFL Finance from distributing gold loans. Due to this, the company’s shares have fallen by 35 percent compared to Friday’s closing price of Rs 596.80.
Jefferies reduced rating
According to analysts, about 32 percent of the AUM of this NBFC is in the form of gold loan book. Jefferies has downgraded its rating on this stock from Buy to Hold, because the RBI ban will reduce the company’s profits.
Why did RBI take action?
The company has been barred by RBI from distributing gold loans with immediate effect. This action has been taken against the company due to non-compliance of gold loan rules. However, the company will be able to continue services for the existing loans disbursed. The central bank had seen some supervisory concerns in the company’s gold loan distribution. There were concerns like purity of gold at the time of loan sanction and default during auction. Apart from this, the company was not following the standard norms for loan to value ratio, charges to be charged from customers, collection, disbursal etc.
Latest Business News