The sudden death of MG George Muthoot, chairman of Muthoot Finance, appears to have cast a shadow over the gold lender’s stocks. On Monday, the stock fell 3.7 percent to close at 1,259.90 yen on the BSE, after opening 6.6 percent lower at 1,205 yen the day.

However, high-ranking representatives of the company did not want to comment on market developments. This is not a new phenomenon and there have been cases in the past where stocks have fallen.

“Effects on the gold price”

Akshay Agarwal, managing director of Acumen Financial Services, said a crash in gold prices, however, can put pressure on Muthoot stocks as loans typically come at 25 percent discounts. The gold price has fallen by almost 20 percent from its peak. Muthoot Finance’s share price opened with a downward gap, trading roughly 3-4 percent lower on news of the chairman’s death.

According to him, Muthoot Finance is an extremely well-run, diversified group of companies with stakes in hospitals to be financed. While the CEO’s death is definitely a major emotional setback, it will not affect the company’s business in the long run, he added. The chairman’s death is unlikely to have any impact on the company’s operations, said CJ George, managing director of Geojit Financial Services. There are many members of the Muthoot family serving at the board level and in other senior positions, particularly under the leadership of George Alexander, who has been the company’s managing director for decades.

Financials did well in 2021, and by budget, PSU banks were booming, followed by large private banks. Gold lending companies did not participate in the rally. Many commercial banks have aggressively increased their gold loan market share. Muthoot Finance is weak despite good results. The stock is down 10 percent from recent highs, George said.

The company’s CEO died Friday evening after falling from his fourth-floor home in New Delhi. In 1993 he assumed the office of CEO and is credited with developing the company into a pan-Indian entity.