Muthoot Exim to expand used-gold buying business

Muthoot Exim, precious metals vertical of the Muthoot Pappachan Group, is planning to expand its used-gold buying stores, Muthoot Gold Point, to 20 by the end of 2016-17. The company is targeting to buy around two tonnes of used-gold directly from customers through these stores.

"We are looking at building a self-sustaining model in which the used-gold purchased through Gold Points would be recycled and manufactured to cater to the low-income customers in the Swarnavarsham business. At present, we are outsourcing the manufacturing, but there are also plans to set up a manufacturing centre for gold recycling at a later stage," said Keyur Shah, CEO of Muthoot precious metals division.

While the potential jewellery market serving the low-income segment was huge, there were currently no players focusing on it, he said. "We are expecting the Swarnavarsham project to be Rs 100 crore by next year March. In three years, business would grow to Rs 500 crore," added Shah.

The group's flagship firm, Muthoot Fincorp, is looking at raising around Rs 1,800 crore through private equity and public issue of non-convertible debentures.