Share of IIFL Finance rose 10% to hit the upper circuit of Rs 420.40 on Fairfax India Holdings announced an investment of up to $200 million for liquidity support after the central bank barred IIFL from servicing any new gold loans.
“We have been long-term investors in the IIFL group of companies and have full trust and confidence in the company’s strong management team led by Nirmal Jain and R Venkataraman. We are confident that Nirmal and Venkat will take corrective actions to meet and exceed RBI’s compliance standards,” said Prem Watsa, Chairman of Fairfax India, read the company’s exchange filing.
On March 04, the Reserve Bank of India directed IIFL to cease sanctioning or disbursing gold loans.
Also, the exchanges changed the band limit from 20% to 10% for the company’s stock. The stock of the company has fallen 37.70% in the last two days and nearly 36% in the last five days. While from medium to long term as well the stock hasn’t performed well and wiped out investors’ around 29% value in the past six months. It has fallen 6.67% in the past year.
To compare, the 50-stock NSE Nifty 50 has risen 0.69% in the last two days and 2.2% in the last five days. The index gave a return of 5% in the last six months and 14% in the last year.