Icra puts Manappuram Finance rating 'under watch'
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Ratings agency Icra today said it has put Manappuram Finance "under watch" following a Reserve Bank circular censuring the Kerala-based gold loan company for accepting deposits.
"Icra has placed the ratings of the debt instruments of Manappuram Finance Ltd on watch with developing implications. This follows RBI's observations with respect to acceptance of deposits by the company," Icra said in a note.
It has ratings of A+, MA+ and A1+ on the company's various debt instruments, indicating their investment safety levels.
Earlier this week, RBI said it had come across various incidents of the company's branches and offices accepting deposits and receipts being issued in the name of group company Manappuram Agro Farms (MAGRO).
The central bank also cautioned the public against depositing money with them.
RBI said Manappuram had turned itself into a non- deposit taking non-bank lender last year, which prohibited it from accepting deposits and made such a thing punishable with imprisonment under existing rules.
The stock of the listed Manappuram Finance was battered but recovered by around 9 per cent yesterday following a MAGRO statement, which said the company had stopped accepting deposits with immediate effect.
It was accepting deposits in "good faith" with the belief that there was no violation of rules, it had added.
Manappuram's scrip closed nearly 7 per cent down at Rs 45.90 at the Bombay Stock Exchange, whose 30-share benchmark gained 0.70 per cent today.