Muthoot, Manappuram Finance crack up to 8% amid Gold price slide

Shares of gold-loan financers' wilted under selling pressure in Sunday's Budget day special trading session as Gold, Silver prices retreated sharply from record high levels.

Shares of gold-loan financing companies cracked up to 8 per cent in early deals on Sunday, February 1, following a massive fall in Gold prices from record high levels. Today, stock markets in India are open for a special trading session on account of the presentation of the Union Budget 2026.  Muthoot Finance stock plunged 7.6 per cent to an intra-day low of ₹3,538 in early trade on the NSE. The counter saw trades of around 1.5 lakh shares in the first 15 minutes of trade. Similarly, Manappuram Finance tumbled over 6 per cent to a low of ₹267.40, amid trades over around 16 lakh shares. IIFL shed 4 per cent to a low of ₹507.  Analysts have attributed the fall in gold-loan financers' shares to fears of potential non-performing assets rising and a threat to credit growth.  G Chokkalingam, founder of Equinomics Research, fears that gold-related firms may be able to lend less for the same volume of Gold after the recent fall, and also existing loans may face NPA issues, in case borrowers are not able to provide additional collaterals.  According to the RBI guidelines, the loan-to-value (LTV) ratio for gold loans up to ₹2.5 lakh stands at 85 per cent, and in case of loan between ₹2.5 lakh - ₹5 lakh LTV stands at 80 per cent.  Going forward, Chokkalingam expects gold prices to face further downward pressure following the recent sharp rally.  Gold prices rallied over 135 per cent in the last 13 months, from levels of around 76,700 at the end of 2024 to a record high of ₹1,80,779 on January 30, 2026.  "Historically, gold prices have delivered an average return of 6 per cent, while the recent gains were not backed by fundamental reasons. Hence, there is a chance of more pain to continue," says Chokkalingam.  As of 9:40 AM, Muthoot Finance traded with a loss of nearly 6 per cent at ₹3,610; while Manappuram Finance and IIFL traded with losses of 2.5 per cent and 4 per cent each at ₹277 and ₹507, respectively.  ALSO READ | Gold, silver ETFs plunge up to 16% as precious metals see historic rout 

Gold, Silver prices fall on Comex

  In the international market, Gold and Silver prices slumped up to 38 per cent in the last two trading sessions. International Gold crashed 16.1 per cent from a high of $5,645.60 to a low of $4,737.80 on Friday. Silver prices nose-dived up to 38.4 per cent from a record high of $121.76 on Thursday to a low of $75 on January 30.  According to reports, the sharp retreat in precious metal prices was partly attributed to a strengthening US dollar, ahead of President Donald Trump nominating Kevin Warsh as a successor to head the Federal Reserve.  Back home, Gold prices sank 9 per cent on the MCX in today's trading sessions. MCX Gold April futures hit an intra-day low of ₹1,38,634 - down 23.3 per cent from its record high of ₹1,80,779 hit on Thursday.  Meanwhile, MCX Silver March futures crashed to an intra-day low of ₹2,65,652 - down a massive 36.8 per cent from its life-time high of ₹4,20,048.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.