Brokerage firm Jefferies has made strategic additions to its model portfolio on Friday, August 28, including Manappuram Finance Ltd., Hindustan Zinc Ltd., Navin Fluorine Ltd., and Meesho Ltd. According to reports from CNBC TV18, Business Standard, The Economic Times, and The Financial Express, the firm will trim its exposure across select lenders to fund the inclusion of Manappuram Finance, while Hindustan Zinc will replace Jindal Steel to gain exposure to the silver theme. Navin Fluorine will replace Ambuja Cements as the brokerage sees growth levers across Contract Development and Manufacturing Organisation (CDMO), cooling products, specialty chemicals and advanced materials. Meesho has been included as a play on mass discretionary consumption, with these additions expected to drive a 23% EPS CAGR during FY26-29E. Jefferies has assigned Manappuram Finance a 2% weight, Hindustan Zinc a 2% weight, and Navin Fluorine a 2% weight in their model portfolio.
The brokerage has positioned Manappuram Finance as its preferred play on the accelerated monetization of household gold through formal lending channels. As reported by Business Standard, The Economic Times, and The Financial Express, Indian households are estimated to hold around 25,000 tonnes of gold, with these holdings worth nearly $3.9 trillion as of March 2026. This compares with around $111 billion worth of gold held by the Reserve Bank of India and is roughly four times the money Indian households have invested in stocks. Gold has remained important despite rapid equity growth, with around $96 billion flowing into equities during FY26 while nearly $79 billion was spent on gold imports. Jefferies estimates that a 10% increase in gold prices could generate around $400 billion in household wealth and potentially create another $20-25 billion in gold loans annually. The brokerage calculates that a 10% increase in gold prices could generate around 80 basis points of additional GDP growth/spending, with Jefferies calling this India's "hidden stimulus" and arguing that the economic impact of the gold rally remains underappreciated.
The gold loan market has experienced significant expansion, with Business Standard, The Economic Times, and The Financial Express reporting that gold-backed loans were estimated at around $197 billion as of March 2026, having grown nearly 73% in dollar terms over the past two years. They now account for around 7% of total bank and non-bank financial company (NBFC) credit. The monetization of household gold through bank and NBFC loans has increased from less than 4% before 2020 to around 5.1% in March 2026. However, only around 15% of household gold holdings are estimated to be monetized, assuming a loan-to-value (LTV) ratio of 65% and factoring in additional lending through unorganized channels. Jefferies estimates that a reversal in this trend over the next two years could result in an 8-10 percentage point increase in the share of gold holdings being monetized, translating into an additional $15-20 billion in gold loans annually. The increase in gold loan assets during FY26 was equivalent to approximately 130 basis points of GDP, as reported by The Economic Times.
The global gold rally is being driven by significant monetary policy developments, with Jefferies global strategist Christopher Wood noting that gold has climbed 6.6% since August 20 as US Treasury Secretary Scott Bessent's efforts to suppress bond yields through expanded buybacks put pressure on the dollar. Wood pointed to Bessent's attempt to replicate Mario Draghi's 2012 "whatever it takes" moment as the trigger, with the US Dollar Index falling and gold mining stocks, tracked by the NYSE Arca Gold BUGS Index, up 49% since bottoming in mid-July. The brokerage expects this rally to extend further on the back of fiscal pressures in the US and Japan keeping interest rates structurally lower. Domestically, gold prices have risen 2.5 times over the past three years, a rally Jefferies expects to continue. The brokerage also notes that globally, gold has comfortably outperformed equities once returns are measured in bullion rather than local currency terms, with the Topix up 213% in yen terms since Japan launched yield curve control in 2016, but down 43% once converted into gold.
The latest market data shows significant trading activity around the portfolio additions. ICICI Prudential Assent Management fell over 4% following a large deal where nearly 10 million shares changed hands at ₹3,065, which was nearly 5% lower than Monday's close. The stock was the worst performer in both the Nifty 200 and Nifty 500 indices. Meanwhile, Bombay Burmah Trading Corp. surged over 13% to ₹1,639 after the Supreme Court recalled a lease-rent demand of ₹46.55 billion from the corporation. This development significantly impacted the stock's performance, with trading volumes reaching over 2.64 million shares on NSE. Recent market developments show mixed performance with Muthoot Finance and Manappuram Finance falling nearly 2% and over 4% respectively, despite their inclusion in the portfolio. Other notable laggards included Container Corp. of India which fell nearly 5%, Tata Power which shed more than 4% after losing its appeal against a $490 million arbitration award, and Muthoot Finance which ended down by nearly 4%. Jefferies also sees potential beneficiaries beyond its model portfolio, with Titan and Kalyan Jewellers benefiting from higher gold prices, while MCX may gain from stronger gold trading activity.
