Manappuram Finance shares surge 22% in eight sessions after brokerages issue bullish calls

The shares of the company had surged significantly to hit an all-time high of Rs 247.6 following the announcement.

The shares of Manappuram Finance surged over 4 percent to hit an intraday high of Rs 243.75 apiece on March 24, as the stock continues to see heavy trading volumes. The shares of the NBFC firm has now risen nearly 22 percent over eight consecutive sessions of gains.

The stock received a significant bump after bullish brokerage calls were issued following the company's Rs 4,400 crore deal with Bain Capital. Manappuram Finance recently announced that Bain Capital will be acquiring 18 percent stake in the company with the said amount. The shares of the company had surged significantly to hit an all-time high of Rs 247.6 following the announcement.

Axis Securities noted that Friday's rise in share price was accompanied with the sharp fall in open interest for the stock. "The combined price rise and a sharp decline in open interest indicate a large amount of short squeeze amid positive news flow, suggesting a potential for continued upward price movement for near term," it had predicted.

ICICI Securities maintained a 'Buy' rating on the stock with a target price of Rs 260 per share. Motilal Oswal meanwhile kept a 'Neutral' rating on Manappuram Finance shares, with a target price of Rs 240 apiece. IDBI Capital Markets however raised its rating for the stock to 'Buy' with a new target price of Rs 252 (from its earlier target price of Rs 200). IDBI Capital said that it believes Manappuram could reclaim some lost ground in the gold loan industry while navigating challenges in the microfinance business.

Elara Securities called the deal a turning point for India's second-largest gold loan provider. The brokerage upgraded that stock to 'Accumulate' from 'Reduce', and raised its target price to Rs 250 apiece from its earlier Rs 185 apiece, citing valuation re-rating potential.