Large corporate backed non-banking finance companies are aggressively entering India's fast-growing gold loan market through strategic acquisitions and expansion plans. According to reports from Essential Business Intelligence, Tata Capital, Aditya Birla Capital, and Godrej Finance have all indicated their intention to capture a share of this expanding sector. The move represents a significant shift in the competitive landscape as established NBFCs seek to diversify their secured lending portfolios, with the entry of prominent players such as Tata Capital, Godrej Capital, and Aditya Birla Capital underscoring a broader strategic shift within the NBFC sector.
Recent industry data reveals that loans against gold jewellery have grown rapidly, with the outstanding market reaching around ₹3.3 lakh crore by May 2026. This growth is accompanied by banks and diversified financial companies increasingly treating gold loans as a mainstream retail lending product. Axis Bank reported a 94% year-on-year increase in its gold-loan book, with borrowers using their gold to access credit as prices climbed. The shift represents a significant departure from the traditional association of gold loans with specialist lenders like Muthoot Finance and Manappuram Finance. As per ET Now, gold is among the most widely held assets in India, driven by deep-rooted cultural and traditional preferences, making gold lending an attractive growth opportunity for lenders looking to expand their retail lending portfolios.
Aditya Birla Capital announced its entry into the gold loan business earlier this month with an ambitious expansion plan. As reported by Essential Business Intelligence, the NBFC is targeting to open 1,000 gold loan branches over the next three years, with a phase-wise rollout of 200-300 dedicated gold loan branches by March 2027 across high-potential markets. Rakesh Singh, ED and CEO-NBFC at Aditya Birla Capital, described gold loans as witnessing strong structural growth in India, with the NBFC's entry representing a 'natural extension' of its secured lending strategy. The company's entry underscores the growing appeal of secured lending as corporates diversify from risky, unsecured loans to secured loans.
Tata Capital, the financial services arm of the Tata Group, announced its entry into gold loan business last month through the acquisition of Yogakshemam Loans Limited (''''''''''''''''Yogloans''''''''), a gold loan focused NBFC. The acquisition gives Tata Capital immediate access to an established gold loan business with Assets Under Management (AUM) of ₹708 crore as of March 31, 2026, and a customer base of around 32,000 gold loan customers. The transaction is based on a pre-money equity valuation of Yogloans not exceeding ₹318 crore. Rajiv Sabharwal, MD & CEO of Tata Capital, said gold loans is a secured lending product with 'significant growth potential'.
Godrej Capital announced entry into gold loan business by acquiring the gold loan business of Kanakadurga Finance. The acquisition gives Godrej Capital immediate access to an established gold loan business with approximately ₹280 crores in AUM, a customer base of nearly 12,000, and network of 54 branches across Andhra Pradesh, along with a team of around 250 employees. Manish Shah, MD & CEO at Godrej Capital, said despite intensifying competition across financial services, including gold loans and wealth management, the NBFC believes India's expanding credit market offers enough room for multiple players to grow. The company plans to rely on technology-driven underwriting and customer servicing to improve efficiency while scaling its lending business.
India's gold loan industry has been witnessing strong momentum in recent years, with gold prices rising more than 150% over the past five years, reinforcing its status as a wealth-generating asset for investors. For gold lenders, rising bullion prices act as a significant tailwind, as higher gold prices increase the value of pledged collateral, allowing lenders to disburse larger loans against the same quantity of gold. This not only supports faster loan book growth but also provides a stronger collateral cushion against potential defaults. As per ET Now, analysts note that the gold loan market is a secure market based on gold collateral, with conservative financing following strict loan-to-value norms prescribed by RBI representing a zero-risk business. However, they warn that stricter regulations could increase competition and reduce margins in the sector.
