Market News
Muthoot Finance, Manappuram, and IIFL shine amid rising gold prices and regulatory support
5 min read | Updated on June 10, 2025, 15:28 IST
SUMMARY
India’s top gold loan NBFCs—Muthoot Finance, Manappuram Finance, and IIFL Finance—show mixed FY25 results amid rising gold prices and the RBI’s updated gold loan norms. Muthoot leads with robust growth, while Manappuram faces margin pressure. RBI’s new guidelines enhance transparency, benefiting the gold loan sector’s future outlook.
Stock list
The gold loan sector in India is entering a phase of regulatory clarity and structural alignment.
India’s top gold loan-focused NBFCs—Muthoot Finance, Manappuram Finance, and IIFL Finance—reported mixed results in FY25. Muthoot continued to demonstrate strong growth and profitability, Manappuram faced margin pressure despite AUM expansion, and IIFL recorded a recovery post-regulatory challenges. Meanwhile, the RBI’s updated gold loan norms and a supportive gold price environment provide a framework for cautious optimism in the sector.
Overview: India's leading gold loan NBFCs
The gold loan market in India is dominated by three major NBFCs. Their branch network, customer base, and focus on secured lending against physical gold have allowed them to serve a segment often underserved by traditional banks.
In FY25, Muthoot continued to lead in terms of scale and profitability. Manappuram’s performance was subdued due to pressure in non-gold verticals, while IIFL began showing signs of stabilisation.
| Particulars | Muthoot Finance | Manappuram Finance | IIFL Finance |
|---|---|---|---|
| CMP | ₹2,557 | ₹265 | ₹482 |
| Market cap | ₹1.02 lakh crore | ₹22,481 crore | ₹20,493 crore |
| P/E | 19.2 | 19.1 | 36.2 |
| Revenue | ₹20,214 crore | ₹10,041 crore | ₹10,211 crore |
| FY25 net profit | ₹5,352 crore | ₹1,173 crore | ₹578 crore |
| YTD | 19.98% | 40.9% | 16.5% |
Muthoot Finance: A benchmark in gold lending
Muthoot Finance maintained a steady performance during the year, demonstrating growth in both its gold loan book and customer base. The company continued to expand its reach, with improvements seen in overall loan volumes and interest collections. Its strong asset quality, extensive branch network, and customer retention contributed to consistent profitability. Dividend payouts also reflected continued confidence in the business.
| Metric | FY25 value | YoY growth |
|---|---|---|
| Gold held as security | 208 tonnes | 11% |
| New customers | 17.99 lakh | 15% |
| Dividend | ₹26 per share | - |
| Gold loan AUM | ₹1.22 lakh crore | 41% |
Manappuram Finance: Stabilising with a Bain Capital backing
Manappuram's performance during the year reflected a mix of progress and challenges. While its gold loan segment saw reasonable growth, other verticals, particularly microfinance, were under pressure. Operating expenses rose, and return ratios moderated. However, with adequate capital buffers and a strategic investment from Bain Capital, the company is positioned for potential recalibration in the coming year.
| Metric | FY25 value | YoY change |
|---|---|---|
| Gold Loan AUM | ₹25,586 crore | +18.7% |
| MFI Book | ₹7,207 crore | -34.1% |
| RoE | 2.5% / 10% | -52% |
IIFL Finance: A resilient rebound
IIFL Finance recorded a gradual recovery after a challenging start to the year. Regulatory restrictions impacted operations in the initial quarters, but following the lifting of the embargo, the company regained momentum, particularly in the gold loan segment. Quarterly profitability improved, and focus shifted toward MSME lending and operational stability. Liquidity and capital adequacy remained supportive.
| Metric | FY25 value | Change |
|---|---|---|
| Loan AUM | ₹78,341 crore | Flat |
| Gold Loan AUM | ₹21,022 crore | +40% QoQ |
| FY25 PAT | ₹578 Cr | -71% YoY |
| Return on Equity (FY25) | 5% | Down from 18% |
Impact of RBI's new guidelines
The Reserve Bank of India, on June 7, 2025, issued final guidelines for gold loan products, with changes to LTV (Loan-to-value ratio) caps and borrower protection measures. These norms, effective from April 1, 2026, aim to enhance transparency and access to formal credit.
| Loan slab | Revised LTV (%) | Previous LTV (%) |
|---|---|---|
| Up to ₹2.5 lakh | 85% | 75% |
| ₹2.5 – ₹5 lakh | 80% | 75% |
| Above ₹5 lakh | 75% | 75% |
- Simplified procedures for small-ticket loans (no credit checks, limited documentation).
- Mandatory disclosure of all charges, including assaying and auction fees.
- Stricter norms for renewals and top-ups—interest must be serviced, and credit checks completed.
- End-use restrictions apply only to loans classified under priority sector lending.
These norms apply uniformly across all regulated entities—banks, NBFCs, and small finance banks - standardising gold loan practices across the financial system.
Impact of gold price movement
Gold prices rose by over 30% in FY25, positively influencing the gold loan segment by:
- Increasing loan amounts due to higher collateral value.
- Improving the security buffer for lenders.
- Enhancing disbursement growth without additional risk exposure.
NBFCs with larger volumes of gold loans, such as Muthoot and IIFL, are expected to benefit from this price environment.
Conclusion
The gold loan sector in India is entering a phase of regulatory clarity and structural alignment. RBI’s updated norms offer improved risk governance while supporting credit accessibility. For NBFCs, this presents both opportunity and responsibility, requiring stronger internal controls, better customer communication, and sharper pricing strategies.
Investors should assess each company’s ability to adapt to these changes, leverage gold price dynamics, and maintain asset quality in the evolving landscape.
About The Author
