Why Manappuram Share Falling: The Reserve Bank of India (RBI) has banned four NBFCs including Manappuram, citing irregularities in material supervision. The four NBFCs that have been banned include Ashirvad Micro Finance (a subsidiary of Manappuram Finance), Arohan Financial Services, DMI Finance and Navi Finserv. After that, shares of Manappuram Finance fell by 15 percent in the early trading session today and reached the lower circuit.

Following this update, the stock has been downgraded by several brokerage firms and its target price has also been cut. Which will be effective from October 21, 2024. Following the regulatory action, Manappuram shares were downgraded by various brokerages. Here we are telling you about it in detail.

Morgan Stanley: Equal Weight | Target price: Rs 170

Morgan Stanley has downgraded Manappuram Finance from overweight to equal-weight while lowering the target price from Rs 262 to Rs 170.

BofA: Buy | Target price: Rs 220

BofA retained its buy rating on the stock but lowered the target price to Rs 220 from Rs 250.

Jefferies: Hold | Target price: Rs 167

Jefferies has downgraded the stock to a hold rating from the previous buy rating and also lowered the target price to Rs 167 from Rs 270.

RBI has imposed restrictions on Ashirvad (MGFL's MFI subsidiary) and select NBFCs, which is likely to reduce earnings and hence Jefferies has cut FY25-26 EPS by 11-19%. Now there is a risk that Ashirvad needs to raise capital and the parent may have to infuse capital if the subsidiary's net worth falls. However, the possibility of a decline in valuation is limited.