JM Financials shares fell almost 4%, while IIFL Finance’s fell 5.5 percent, after the Reserve Bank of India launched a special audit of the two businesses.
JM Financial traded at Rs 72 on the BSE at 12.40pm, down 3% from the previous close, while IIFL Finance declined 2.5 percent to Rs 325 a share.
JM Financial continued to decrease, trading in the negative in 11 of the past 16 sessions, while IIFL Finance lost in 12 sessions. IIFL Finance has lost more than 45% of its value since early March, while JM Financial has lost about 25%.
Predictions
Experts predict that the audit will take four to six weeks, perhaps resulting in tighter systems to assure clean loans and prevent overleveraging. Analysts also argued that a coordinated regulatory response may alleviate worries about unclear credit utilisation.
The RBI earlier expressed worry about IIFL Finance’s gold loan portfolio and restricted certain lending activity. JM Financial was likewise prohibited from conducting certain financial activities.
In its most recent report, Motilal Oswal stated that protracted restrictions might lead to additional deterioration and reputational harm for IIFL Finance.
