Growing balance sheet may not be easy for gold loan companies

While firms aim to share of non-gold business, stiff competition may keep growth under check

Stocks of Muthoot Finance (Muthoot) and Manappuram Finance (Manappuram) are down 10-12 per cent in the past one month. Besides overall volatility in the market, lower gold prices and rising competition impacted investor sentiment. These factors may keep a check on stock prices, unless these firms allay market fears with better numbers.
 
“Other companies and banks have also got into gold loan business. Firms such as Muthoot and Manappuram face competition from micro-finance institutions, which offer loans to rural and semi-urban areas,” said G Chokkalingam, founder & MD of Equinomics Research & Advisory.