Muthoot Fin loses all sheen

Muthoot Finance is currently the biggest loser on the BSE, down over 16% at Rs.126.65, with an intra day low at Rs.121.85. Volumes are huge at almost 3.5 lakh shares compared to 31,000 shares over two week average.

The stock has tanked with the gold prices. After the fall on Saturday, today also the yellow metal is expected to rule weak as at Singapore spot gold was down marginally at $1,479.80 an ounce, while gold futures maturing in June dropped to $1,482.50. This directly affects companies like Muthoot which are into gold financing and with demand tapering off, it means dull business. Also, there are reports stating that the RBI will be in all likelihood calling out for information from gold loan companies and provide directions to those with high loan-to-value ratio.