September 25, 2022


On the 10 th of November, we at Manappuram Finance Limited, reported our second quarter results.Our performance was very impressive with the net profit of Rs.350 crore for the half year up to September 30 being equal to the net profit for the whole of last year.

However, it so happened that our results were declared against the backdrop of the government’s announcement about the demonetization of 500 and 1000 rupee currency notes that caught everyone by surprise. Adding to the woes was the totally unexpected outcome of the US presidential elections where Donald Trump defied all odds to beat Hillary Clinton. Markets are usually unpredictable but if there’s one thing that can be said with certainty, it is that markets don’t like uncertainty. Not surprisingly, the Indian stock markets reacted adversely to this double whammy and traded at heavy losses.

And so, in both the investor con call immediately following the results and in the media interactions subsequently, the hot topic for discussion was how Manappuram Finance and other NBFCs would be affected by the measure. In a nutshell, there were two immediate issues we faced post the demonetization announcement. Firstly, some of our customers faced problems in making repayments as we had to stop accepting old notes all of a sudden. Secondly, with regard to loan disbursements, we faced hassles in the availability of cash for disbursing small value gold loans where borrowers are keen to get the amount in cash. (Loans more than 1 lakh rupees are necessarily disbursed through a bank account being a requirement of RBI.)



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