Motilal Oswal
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Motilal Oswal

Manappuram Finance says Sebi notice is only at inquiry stage, don’t expect material impact

Updated : June 10, 2019 11:52 AM IST

Manappuram Finance is in focus after reports suggest that market regulator Securities and Exchange Board of India (Sebi) has sent a notice to five asset management companies in the insider trading case. On Friday, Manappuram said it received a showcause notice from the market regulator alleging that its officials disclosed price-sensitive information to a research analyst firm in 2013.

To discuss this and the business outlook in detail, CNBC-TV18 spoke with VP Nandakumar, MD and CEO, Manappuram Finance.

Talking about the Sebi notice, Nandakumar said it is a matter dated 2013 wherein some company executives while in discussion with analysts disclosed about the probability of a decline in profit in that quarter, which was done in good faith.

"However, nobody has profited out of that. The company has consulted the lawyers and would look at a settlement with Sebi," he clarified.

“This is still at the inquiry stage, there is no penalty and so do not expect any material damage on account of this,” Nandakumar added.

On the business front, when asked if customers used the hike in gold prices as an opportunity to pledge more, he said, "When the gold prices rise the tendency is otherwise because they think gold prices would go down after some time. However, some customers use this opportunity to encash by selling gold in the market, Nandakumar said.

Talking about International Finance Corporation (IFC) investment, he said the initial approval is for $75 million and $35 million would be dispersed either today or tomorrow because one more no objection certificate (NOC) has to be obtained from a lender.

"The second tranche is expected to come in the second quarter. This investment is coming in as a medium-term debt," Nandakumar added.

However, the MD said the company is looking at other loans from IFC and expect their other subsidiaries to benefit from that. “We are also looking at a long-term relationship with IFC, a multilateral lending institution and hope to bring in other such institutions going forward,” he said.
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