By Deepak Rangan
Manappuram Finance (BSE: MANAPFIN), the gold loan company, is under intense pressure after the Reserve Bank of India (RBI) warned the company against accepting any deposits from the public while adding that those who deposit money with the company would do it at their on risk.
Shares of the company have been tanking after the RBI statement. More fire was added after the wife of a Director sold almost 80% of her share, an action which the company attributes to the deteriorating health of the Director. Sarada Sankaranarayanan, wife of Director A R Sankaranarayanan, sold 1.363 million shares of her total holding of 1.663 mn shares on Feb 06 and 09, as per the disclosure on the BSE.
Investor sentiment is pretty much shaken and with the RBI indicating a string of possible regulations on firms like Manappuram, most opt to stay away from the company until the matter is cleared.
Technically, the stock is trading between a very important support level of around Rs 42 (blue line, in chart below) and a resistance level of around Rs 66 (red line). A downward break could indicate a sell signal on the back of a strong negative investor sentiment. Many analysts are also expecting the stock to remain under pressure until the RBI's proposed guidelines become clear.
Chart courtesy: bazaartrend.com
