Manappuram optimistic on new norms; markets not convinced

Manappuram Finance has said that it remains optimistic on RBI's new gold loan norms, saying that its present LTV (loan to value) is 66%.

The RBI it may be recalled had stipulated an LTV ratio of 60%. The markets were not convinced on Manappuram's optimism, with the share price continuing to drag lower by 0.51%, following Thursday's sharp drop of 17%,

V. P. Nanadakumar, Executive Chairman of the company said, “We are of the opinion that the new RBI measures will ultimately strengthen the well capitalised established players in the business with sound operating and risk management practices. It addresses the risk to the sector arising from the entry of the multiple new players lacking the experience or the required understanding of the nuances of the business.”

The capital adequacy ratio of Manappuram Finance Limited is already at 18.37% (as on December 31, 2011) as against 12% that has to be achieved by April 2014, as per RBI norms.

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