India's IIFL Finance jumps 13% after cenbank lifts curb on gold loan business

IIFL Finance

20/09/2024 05:51

BENGALURU, Sept 20 (Reuters) - Shares in India's IIFL
Finance  IIFL.NS  jumped about 13% on Friday, after the
country's central bank lifted restrictions on the non-banking
financial company's gold loan business, removing a key overhang
on its financials and stock.
    Shares rose as much as 13.2% to 560.95 rupees, their highest
since late February. The stock was last up 9.2% at 541 rupees as
of 10:12 am IST. It had fallen about 14% as of last close, after
the RBI's ban came in March.
    In March, the Reserve Bank of India had ordered IIFL Finance
to stop disbursing gold loans with immediate effect, citing
"material supervisory concerns" in its gold loan portfolio.
    Following the curbs, the company started a special audit in
April as directed by the RBI.
    Gold loans accounted for 21% of the company's total loan
assets, as of June 30, down from 30% as of March-end.
    Some analysts had expected rival gold loan financiers such
as Manappuram Finance  MNFL.NS  and Muthoot Finance  MUTT.NS  to
benefit from lower competitive intensity after the regulatory
ban on IIFL Finance.
   However, Muthoot Finance could now be at a higher risk of
giving up gains and underperforming on the lifting of
restrictions, Morgan Stanley said in a note on Thursday. 
    On Friday, Muthoot Finance was down 3% while Manappuram
Finance shed 1%.

 (Reporting by Dimpal Gulwani; Editing by Rashmi Aich)
 ((Dimpal.Gulwani@thomsonreuters.com;))