Margin concerns largely priced in for Muthoot, Manappuram Finance

Three NBFCs in gold financing have seen AUM growth on a quarter-on-quarter (Q-o-Q) basis for the gold segments over the last three quarters

The rising price of gold has a positive effect on the assets under management (AUM) of gold-backed lenders such as leading gold NBFCs, Muthoot Finance, and Manappuram Finance – AUM rises when gold price increases.

This is also true in the gold-financing segment for banks. Due to competitive intensity, there may also be yield compressions in gold loans.

In the October-December quarter (Q3) of FY24, stable yields and AUM growth have helped gold loan businesses improve their financials despite competition. Non-gold segments have also performed well. Higher competitive intensity remains a key risk, going forward.

Three NBFCs in gold financing,