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Non banking finance companies, the soft underbelly of the Indian financial sector, have come under severe hammering over the last few days with the latest lending scam to hit the Indian financial markets.

But some see an opportunity in the mayhem.

CLSA (Mauritius) Limited, in particular, has gone ahead and purchased shares worth Rs 440 crore ($100 million) in LIC Housing Finance Ltd, a company that is the epicentre of the scam.

This came even as UBS downgraded LIC Housing Finance from neutral to sell on Thursday. The stock has already lost one-third of its values since hitting the 52-week-high in September.

The company--whose CEO Ramachandran Nair was arrested by the CBI on alleged charges of bribery early this week and has been replaced by VK Sharma, who is currently looking after parent insurance firm LIC’s South India business--tanked nearly 12% again on Friday to close at Rs 932 or 12% below the price at which CLSA picked the equity.

The securities major CLSA could be betting on bottom-fishing when the ongoing madness surrounding the scam subsides. Some technical analysts had been saying that one could start buying LIC Housing Finance now. Incidentally, the housing finance company had just last month approved a stock split that could also provide some liquidity based upside to investors specially at the new levels.

Incidentally, the same can’t be said of the timing of another large marquee institutional player, Goldman Sachs that picked a small stake for around Rs 71 crore ($16 million) last month when price was hovering around Rs 1,346. It is not clear if Goldman Sachs has slowly exited its investments, else it could be sitting on unrealised haircut of around 30%.

Bloodbath continued in the market with housing finance and debt syndication firms getting pasted again. GIC Housing Finance dropped 6.6%, Almondz Capital & Management Services scrip declined 4.8% to hit the lower circuit filter, Canfin Home down 6.17%, Sahara Housing Finance down 4% and Money Matters Financial Services crashed 10% to hit its lower circuit.

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