Despite ambitious growth plans from Capri Global Capital, gold loan stocks experienced significant declines today. Manappuram Finance fell as much as 5.06% to hit an intraday low of ₹348.40, while Muthoot Finance declined 2.86% to ₹3,110.15 and IIFL Finance dropped 1.68% to hit an intraday low of ₹643. According to Essential Business Intelligence, the decline was accompanied by strong trading volumes, with around 68 lakh shares of Manappuram Finance worth ₹238.68 crore changing hands across BSE and NSE. Muthoot Finance saw around 5 lakh shares worth ₹155.55 crore traded, and IIFL Finance recorded 10 lakh shares worth ₹64.50 crore.
According to reports from NDTV Profit, Capri Global Capital expects its gold loan portfolio to grow by around 40% this year, building on an impressive 111% growth achieved last year. The company is targeting a gold loan book of ₹28,000 crore by the end of the year, significantly expanding from its current portfolio of nearly ₹20,000 crore that was built in less than four years since starting the gold loan business in 2022.
As reported by NDTV Profit, Capri Global plans to add 400 new branches this year, with the majority expected to be gold loan branches. Managing Director Rajesh Sharma indicated that the expansion is expected to be completed by December. The company is focusing on smaller-ticket gold loans rather than competing aggressively in larger-ticket loans and teaser-rate offerings, which should help maintain yields while growing the portfolio.
According to Essential Business Intelligence, gold has witnessed some profit booking, which has weighed on sentiment across the gold financing space. Gold 24K was down ₹430, or 0.27%, at ₹158,970 per 10 grams at the time of latest check. Ravi Singh, chief research officer at Master Capital Services, explained that the recent decline in gold loan stocks is largely a result of profit booking following the strong run-up seen in both gold prices and these counters. However, Singh believes the broader structure of the gold loan segment remains positive, with the long-term growth opportunity in secured gold lending continuing to remain strong.
As reported by NDTV Profit, Capri Global has not seen a significant deterioration in its secured MSME, affordable housing or gold loan portfolios. The company follows a strict loan-to-value process, with its current portfolio-level LTV around 72%, while some income-generating loans can go up to 80% based on borrower income and repayment track record. Consumption-oriented gold loans are generally capped at 75% at the time of disbursement. Sharma said the company's LTV monitoring and collection process helps manage the impact of fluctuations in gold prices on the portfolio.
