Manappuram Finance shares tank 14% in early trade, here’s why

Shares of Manappuram Finance plunged 14% today after the Enforcement Directorate (ED) seized assets worth Rs 143 crore after searching six premises of Manappuram Finance Limited and its Managing Director, VP Nandakumar, in Kerala's Thrissur as part of its investigation into allegations of money laundering from illegal deposits from the public.

Market cap of the firm declined to Rs 8722 crore.  The stock fell 13.96% to Rs 102.60 in early trade. It opened with a loss of 7.51% at Rs 110.30 against the previous close of Rs 119.25 today.  

In terms of technicals, the relative strength index (RSI) of the stock stands at 43.6, signaling it's trading neither in overbought nor in the oversold zone. Manappuram Finance shares have a beta of 1.5, indicating high volatility in a year. Stock of Manappuram Finance is trading lower than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.  

The stock has lost 7.3% in one year and fallen 10.89% since the beginning of this year. The share has declined 17% in a month. Total 28.77 lakh shares of the firm changed hands amounting to a turnover of Rs 30.59 crore on BSE.  

The ED has accused Nandakumar of indulging in money laundering through the "illegal" collection of deposits from the public. In a statement, the agency said the proceeds of crime had been "diverted and invested" by Nandakumar into immovable properties in his name, in the name of his spouse and children and into the shares of Manappuram Finance Ltd.  

"Hence, ED has frozen the assets of V P Nandakumar under the Prevention of Money Laundering Act (PMLA), totalling Rs 143 crore," it said, adding that the frozen assets include deposits kept in eight bank accounts, investment in listed shares and shares of Manappuram Finance Limited.