Indian gold lenders rise; RBI's loan-to-value hike to boost credit growth

IIFL Finance

06/06/2025 09:03

** Shares of Indian gold financiers jump

** Manappuram Finance MNFL.NS up ~3%, while Muthoot Finance MUTT.NS and IIFL Finance IIFL.NS jump ~7% and ~5%, respectively

** Reserve Bank of India will finalise regulations on gold loans by early next week, chief Sanjay Malhotra says

** Adds aims to increase loan-to-value ratio to 85% from 75% currently for loans below 250,000 rupees ($2,916)

** Loan-to-value ratio compares the loan amount to the asset's value

** The proposal of a higher LTV is a big positive and will boost credit growth for gold lenders, especially Muthoot and Manappuram, says Elara Securities analyst Shweta Daptardar

** No credit appraisals required for loans up to 250,000 rupees also positive for these lenders with minimal disruption to existing operational systems, Daptardar adds

** On an avg, MUTT is rated "buy", MNFL "hold" and IIFL "strong buy" - data compiled by LSEG

** YTD MUTT up 14%, MNFL up 28% and IIFL 8% higher

($1 = 85.7180 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru)

 ((Hritam.Mukherjee@thomsonreuters.com;))