Shares of Manappuram Finance fell nearly 7% to Rs 120.75 per share in morning trade on the BSE on May 3 following reports that the Enforcement Directorate (ED) had raided the firm’s Thrissur offices in Kerala state.

The report further stated that searches were also carried out at the premises of the company’s promoters. The company is alleged to have raised funds without the approval of the RBI.

Following the developments, the stock fell 4.47% to a low of Rs 123.85 on the BSE. A total of 439,000 shares have traded so far, compared with the two-week average of 285,000 shares. At 11:18 am, there were 5,71,678 sell orders against 4,75,854 buy orders.

ED is investigating allegations of illegally collecting more than Rs 150 crore deposits from the public without RBI approval. The organization is suspected of conducting large-scale cash transactions without complying with KYC norms.

The news comes as Manappuram Finance’s board is considering a bond issue later this month. The company is considering various options for raising funds through borrowing, including issuing multiple debt securities in domestic and foreign securities markets through public offerings, private placements or the issuance of commercial paper.

“Based on prevailing market conditions, the company’s board of directors/financial resources and management committee/board bond committee may consider and approve bond issuance during May 2023, subject to such terms and conditions including the issue price of the debt securities, the board/related committee may deem appropriate,” the company said on April 29.