With Kerala battling its worst floods in nearly 100 years, banks and tyre manufacturers having exposure to the state have been among the worst hit. Share prices of Kerala-based lenders, rubber manufacturers and other companies witnessed selling on Monday. Eastern Treads, a manufacturer of rubber products, closed 7.94% down at `66.10 on BSE Sensex. It was the biggest loser among the stocks having exposure to Kerala. It was followed by Federal Bank, which ended 5.62% lower at `81.50, and South Indian Bank down 2.46% at `17.85.
Apollo Tyres, which sources rubber from Kerala, closed the session 1.76% down at `261.70. Commenting on Federal Bank, Jefferies, in a report, said that its CASA is flat and current account growth is disappointing. “The CASA ratio remains flat q-o-q at 33.5%. That said, current account deposit growth despite corporate loan book growing at a fast pace is disappointing”. Emkay, in a report, said, “The impact will be felt by a few banks, and non-banking finance companies having sizeable exposure to the state. Federal Bank has the biggest risk, with 34% of lending and 64% of deposits directly linked to the state. South Indian Bank has a total lending exposure of 41% to Kerala, of which 42% is towards small and medium enterprises.”
Other losers on Monday included Manappuram Finance, Muthoot Finance, Cochin Shipyard, Rubfila International, Aster DM Healthcare, Geojit Financial Services and Cochin Minerals & Rutile. Cochin Shipyard, India’s largest shipbuilding and maintenance facility that got listed in August 2017, has slipped 20.9% since the beginning of the year and 3.91% since August 8. In an exchange notification, Cochin Shipyard said the company’s plant and machinery remained safe and did not suffer any adverse impact of the inclement weather.
“As an immediate measure, the company will be contributing `1 crore towards the chief minister’s relief fund under the company’s CSR fund,” it added. While Aster DM Healthcare that closed the session 1.2% down at `187.25 on Monday, has gained 10.2% since August 8. Jefferies also pointed out that the floods will lead to some recovery delays and losses for banks in agriculture loans, medium enterprise priority sector loans, home loans and trade-activities. “Of Kerala loans, 24% of exposure is to agriculture, 16% to MSME priority sector loans, 11% to housing loans,” it added.