Bharat Financial Inclusion shares fell nearly 11 per cent today, following the arrest of its president S Dilli Raj. According to Bharat Financial Inclusion, Mr Dilli Raj was arrested by the Enforcement Directorate in connection to an on-going investigation at his former company First Leasing.
The microfinance lender, in a release to the exchanges on Monday, clarified that the investigation does not relate to Bharat Financial Inclusion Limited.
"All loans taken during his (Mr Dilli Raj) tenure have been repaid by First Leasing and that the complaint filed by IDBI Bank relates to loans sanctioned during the years 2012 and 2013, which was six years after he ceased to be an employee of First Leasing," Bharat Financial Inclusion said in a statement.
Mr Dilli Raj joined Bharat Financial Inclusion, formerly known as SKS Microfinance, in 2008.
In a separate development, global brokerage Credit Suisse downgraded the stock to "underperform" from "neutral", citing its expensive valuation.
Credit Suisse said the rich valuation of Bharat Financial Inclusion leaves little scope for further upside.
At Monday's closing price of Rs 910.70, Bharat Financial Inclusion shares were valued at four times their FY18 estimated book value, which is expensive, the brokerage said.
Bharat Financial Inclusion shares closed 9.67 per cent lower at Rs 822.65 compared to 0.16 per cent decline in the broader Nifty.
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