The Wealth Company has become the first asset management company to sign up in principle for the National Stock Exchange's electronic gold receipts platform, marking a significant milestone in institutional participation in digital gold trading. According to reports from The Financial Express, the company, part of the Pantomath Group, has signed up subject to the applicable regulatory guidance being made available.
The electronic gold receipts (EGRs) were launched by the NSE earlier this month, with live trading of these digital, physically-backed gold units beginning on Monday. As reported by The Financial Express, EGRs are exchange-traded instruments backed by physical gold of standardised purity and are stored in vaults accredited by the Securities and Exchange Board of India. These can be bought or sold through a demat account. The platform offers trading from Monday to Friday, between 9:00 AM and 11:30 PM, with extended hours to 11:55 PM based on US daylight saving time, with transactions following a T+1 settlement cycle for normal market transactions and T+2 for auction market settlements.
The participation is intended to broaden the investor access to gold through institutional investment vehicles and contribute to the development of a deep and vibrant EGR ecosystem in India, according to an NSE release. According to The Financial Express, NSE Managing Director and CEO Ashish Kumar Chauhan stated that the participation of asset managers is central to building scale, depth and investor confidence in this segment.
While both EGRs and Gold ETFs allow electronic and exchange-traded gold exposure, they operate on fundamentally different structures. EGRs represent direct ownership of physical gold stored in SEBI-regulated vaults, with investors able to convert electronic holdings into physical gold through the vaulting framework, subject to charges and operational procedures. In contrast, Gold ETFs are mutual fund units backed by gold holdings managed by asset management companies, whose value tracks gold prices but do not offer physical redemption options. As per recent analysis, EGRs may be suitable for investors seeking direct ownership with redemption options, while Gold ETFs may appeal to those seeking established, widely traded gold instruments without physical redemption requirements.
According to experts cited by The Financial Express, higher cost of physical gold due to the recent hike in import duty may gradually drive volumes of EGRs, as investors may prefer easy liquidity, transparency, and lower transaction costs compared to physical ownership of gold. However, in the near-to-medium term, they are likely to prefer physical gold due to distrust towards digital formats and long-standing behavioural patterns. Since EGRs are a relatively new investment segment, trading volumes and market participation may initially remain limited with wider bid-ask spreads during the evolving stage.
