Hold stocks of gold loan companies: Sonam Udasi, IDBI Capital

Sonam Udasi, Head of Research, IDBI Capital, in a chat with ET Now, gives his views on gold loan companies


What is the view really on gold loan companies the likes of Manappuram and Muthoot?

Frankly whatever we have read of the guidelines that have come from RBI and whatever has been mooted for these companies it is not as bad as the microfinance companies. There are certainly some regulation on the kind of charges that they can put up as well as what gearing they can take on and as well as on the capital adequacy but gold loan essentially has been a traditional form of business. My own sense would be that right now these companies are very heavily FII invested and there are concerns which in my view are short term right now.

They do not want to be caught in this regulation right now but at these levels if I start to look at FY13 and FY14 both these companies would be available below book right now and for someone who is taking a view on where from a sure the growth may not be as spectacular as it was earlier but their books are quite decent. The only overhang is that the RBI may do something even more than this and they are not finished here so if that being the case then it is better to stay out and watch a while because I do not think these counters will go up in a hurry in any case. Those who are holding on right now the damage has already been done and my own view would be to just hold on for sometime see whether there is any further negative, I do not think there should be. They have already clarified but if there is then they need to take a call on that.