Muthoot, Manappuram hit new highs in weak market; rally upto 17% in 1 week

Shares of gold finance companies Muthoot Finance (₹2,598.80) and Manappuram Finance (₹275) hit their respective new highs, gaining 2 per cent on the BSE in Thursday's intra-day trade in an otherwise weak market. In comparison, the BSE Sensex was down 0.43 per cent at 82,158 at 11:40 AM.
In past one week, the stock price of Manappuram Finance (up 17 per cent) and Muthoot Finance (13 per cent) have outperformed the market after the Reserve Bank of India (RBI) on Friday, June 6, 2025 issued its final rules on loans against gold collateral, detailing easier norms for small ticket loans. The BSE Sensex was up 1 per cent during the same period.
In financial year 2024-25 (FY25), Muthoot Finance, India's largest gold loan Non-Banking Financial Company (NBFC), reported a consolidated loan asset under management (AUM) of ₹1.22 trillion, having crossed ₹1 trillion in gold loan AUM. Track LIVE Stock Market Updates
RBI revised guidelines for gold, silver-backed loans
The RBI announced the final gold lending guidelines to harmonise gold lending, including credit assessment for non-consumption loans, loan-to-value (LTV) thresholds based on ticket sizes, loan tenors, renewal/top-ups, internal audits, gold auctions, and other operational processes.
The RBI's revised guidelines for gold and silver-backed loans, effective April 1, 2026, are aimed at improving credit access for small borrowers and harmonising regulations across banks and NBFCs.
The LTV ratio for loans up to ₹2.5 lakh has been raised to 85 per cent (from 75 per cent), while loans between ₹2.5–5 lakh are capped at 80 per cent. Bullet loans must calculate LTV on the total maturity payout. Lending against bullion, exchange-traded funds (ETFs), or re-pledging is barred. These guidelines will apply uniformly to all the regulated entities doing gold lending, including banks, small finance banks (SFBs), and NBFCs.
Brokerage, Management views on Muthoot, Manappuram Finance
Structurally positive for small-ticket credit lenders; the higher LTV limits and relaxed norms are expected to drive growth in gold loan demand, benefiting players like Muthoot Finance and Manappuram Finance, according to ICICI Securities.
Now that the RBI has released the final guidelines on gold loans, the overhang on the gold loan NBFCs will now go away. This is positive for gold loan NBFCs, particularly Muthoot, which had borne the maximum brunt of the draft gold lending guidelines.
Meanwhile, looking ahead to FY'26, the management of Manappuram Finance remains optimistic. They expect the company's gold AUM to grow strongly, supporting digital onboarding and rural demand. The gold loan portfolio remains the company's core strength, accounting for 59.5 per cent of consolidated AUM compared to 55.4 per cent in Q3FY25. As of March 31, 2025, the company's consolidated gold loan AUM stood at ₹ 25,586 crore, up by 4.4 per cent quarter-on-quarter (Q-o-Q) and 18.7 per cent year-on-year (Y-o-Y) in spite of heightened competition, the management said.
Meanwhile, across the six rate cut cycles since calendar year 2002, NBFC had consistently outperformed during and/or after easing phases, delivering 79 per cent average 12-month market capitalisation gains, 24 per cent profit after tax growth, and 15 per cent book value (BV) expansion. Even during the cut phase, they had returned to 37 per cent on average, outpacing banks. Their outperformance stemmed from high sensitivity to liquidity and funding cost, according to analysts at Elara Capital. The brokerage firm in the strategy report said its preferred picks post rate cuts are HDFC Bank, Axis Bank, State Bank of India, Bank of Baroda, Bajaj Finance, Muthoot Finance, Mahindra & Mahindra, TVS Motors, Godrej Properties, Sobha, and Oberoi Realty.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

News18

an hour ago

• News18

India's Forex Reserves Surge $2.3 Billion To $698.9 Billion, To Touch All-Time High Soon

Last Updated: Gold reserves also contribute to the rise, increasing by $428 million to reach $86.32 billion. India's foreign exchange reserves jumped by $2.3 billion to $698.9 billion for the week ended June 13, 2025, according to data released by the Reserve Bank of India (RBI) on June 20. This comes after a rise of $5.17 billion in the previous week, when the reserves had stood at $696.65 billion. The current level is inching closer to the all-time high of $704.89 billion recorded in end-September 2024. The increase in the latest week was mainly due to a $1.74 billion rise in foreign currency assets, which make up the largest component of the reserves and include the impact of movements in non-dollar currencies like the euro, pound and yen. Gold reserves also contributed to the rise, increasing by $428 million to reach $86.32 billion. The share of gold maintained by the RBI in its kitty has almost doubled since 2021, as central banks globally have increasingly accumulated safe-haven gold in their forex reserves. In 2023, India added around $58 billion to its foreign exchange reserves, contrasting with a cumulative decline of $71 billion in 2022. In 2024, the reserves rose by a little over $20 billion. Foreign exchange reserves, or FX reserves, are assets held by a nation's central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling. Special Drawing Rights (SDRs) rose by $85 million to $18.76 billion during the week ended June 13, while India's reserve position with the International Monetary Fund (IMF) went up by $43 million to $4.45 billion. The RBI often intervenes by managing liquidity, including selling dollars, to prevent steep Rupee depreciation. The RBI strategically buys dollars when the Rupee is strong and sells when it weakens. During the previous monetary policy announcement, RBI Governor Sanjay Malhotra said the foreign exchange kitty is sufficient to meet 11 months of the country's imports and about 96 per cent of external debt. A rise in forex reserves also boosts the rupee by boosting India's external financial position. The rupee on June 20 snapped its three-day losing streak and settled with a gain of 18 paise at 86.55 against the US dollar, buoyed by a massive inflow of foreign capital, retreating crude oil prices and a weakening greenback. A robust sentiment in domestic equity markets further supported the local unit, according to forex traders. At the interbank foreign exchange, the domestic currency opened at 86.65 and traded in a narrow range of 86.55-86.67, before ending the session at its intra-day peak of 86.55 against the US dollar, registering a gain of 18 paise from previous closing level. First Published: June 21, 2025, 09:08 IST

Time of India

2 hours ago

• Time of India

Temporary relief? Sensex soars 1,046 points on foreign buying

Sensex soars 1,046 points on foreign buying (Picture credit: ANI) MUMBAI: Strong foreign fund buying supported by speculators' short covering late in the session on Friday led to a four-figure points jump in the Sensex. After opening marginally higher, the benchmark picked up gains through the session to close 1,046 points or 1.3 per cent higher above the 82,400-point mark. On the NSE, Nifty too followed a similar trend and closed 244 points or 1 per cent higher at 25,038 points. Foreign investors, after showing mixed trends for the last few sessions, turned strong buyers on Friday with a net inflow of Rs 7,704 crore. Domestic funds, on the other hand, were net sellers at Rs 3,050 crore, BSE data showed. According to Prashanth Tapse of Mehta Equities, markets witnessed consolidation after the recent spell of subdued trend, as strong European cues and positive Dow Futures triggered a massive rally in local benchmarks. "Investors also resorted to short covering ahead of next week's monthly derivatives expiry." Tapse, despite Friday's gains, is cautious about the market direction since a number of headwinds have a chance of impeding the northward run. Investors should remain cautious due to the ongoing West Asia conflict, as any spike in crude oil prices owing to escalation in tension could fuel uncertainty and spook markets, he said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Clean Warehouses = Safe Workplaces SearchMore Learn More Undo Late on Friday, Brent crude was trading at about $76.7/barrel while WTI crude was slightly above the $75 mark. Both were trading around their four-month high levels. The day's session in the domestic market made investors richer by nearly Rs 5 lakh crore, with BSE's market capitalisation now at Rs 447.7 lakh crore. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now

Time of India

2 hours ago

• Time of India

RBI's jumbo rate cut aims to spur spending & investment

RBI MUMBAI: RBI aimed to signal businesses that cheap funds will be available with its double-barrel rate cut earlier this month to boost growth through spending and investment. According to minutes of the monetary policy committee's meeting, the interest rate cut was triggered by signs that companies were deferring investment plans despite rising capacity utilisation even as inflation was expected to undershoot. Continued uncertainty had pushed top executives into what central bank officials described as a 'zone of inaction'. The MPC voted for an unexpected 50-basis-point (100bps = 1 percentage point) cut in the repo rate or the rate at which RBI lends to banks. The MPC also voted to change the policy stance to 'neutral' from 'accommodative' which RBI governor Sanjay Malhotra said gave it room to 'cut, pause or hike rate' depending on evolving conditions. . 'It is expected that the front-loaded rate action along with certainty on the liquidity front would send a clear signal to economic agents, thereby supporting consumption and investment through lower cost of borrowing,' the governor said in the minutes of the June 6-9 MPC meeting. The meeting also offered a glimpse into the policy stance of deputy governor Poonam Gupta, who joined the central bank in April. Her comments suggest a dovish leaning within the current policy context. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like What She Did Mid-Air Left Passengers Speechless medalmerit Learn More Undo Gupta underscored the importance of monetary support for accelerating growth, and said policy must help the economy 'attain and even surpass past rates of growth'. She voted for a 50bps cut, citing the need to 'foster policy certainty and faster transmission'. She also flagged the possibility of inflation falling below target. Internal member Rajiv Ranjan also backed a 50bps cut, saying the decline in inflation was sharper than expected, giving the central bank room to focus on growth. He said larger cuts in an expansionary phase are often needed to have the same impact on output as smaller hikes during contractionary periods. According to him, front-loading sends a stronger signal and speeds up transmission. 'It would be appropriate to provide some certainty on the domestic rate and liquidity front so that agents do not delay and postpone their decisions. Literature suggests that uncertainty plays a role in forming the 'zone of inaction',' Ranjan said. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now