A 5-7% correction may offer good entry point in SKS Microfinance: Mehraboon Irani

In a chat with ET Now, Mehraboon Irani, Nirmal Bang Securities, talks about the recent slide in the shares of SKS Microfinance. The NBFC has failed to secure a banking licence in the RBI's latest list.

ET Now: What is your specific call on SKS Microfinance? It was a darling for a number of years. Do you think that after the big correction in the stock, all the pain is in the price?

Mehraboon Irani: The stoc had gone up a little bit too sharply and not getting a bank licence has definitely resulted in the valuations possibly coming down.
The fact is that the landscape for SKS Microfinance has changed completely as of now, but not getting a bank licence is not the end of the world.

I would say another 5-10 per cent correction would give investors a chance to look at the stock afresh because the scrip had gone up very sharply and the 16 per cent fall on Friday may not be the end of the fall. Should one buy in a hurry? The answer is no. But if it comes down by say 5-7 per cent one should be going and buying into it because the banking licence was not something for which the analysts were too much gung ho about.