Latest news with #MuthootFinanceLtd
Business Upturn
2 days ago
- Business
- Business Upturn
Muthoot Finance shares spike 7% after RBI revises LTV revision to 85% from 75% for gold loan financiers
Shares of Muthoot Finance Ltd surged 6.72% to ₹2,448.80 on Friday after RBI Governor Sanjay Malhotra announced key changes in gold loan regulations during the Monetary Policy Committee (MPC) address. Among the major regulatory changes: No credit appraisal will be required for gold loans up to ₹2.5 lakh per borrower End-use monitoring will only be mandated under Priority Sector Lending (PSL) Loan-to-value (LTV) ratio for small gold loans will be reduced to 85%, including the interest component These relaxations are expected to ease operational burdens and improve credit accessibility for middle- and lower-income segments that heavily depend on gold-backed financing. The announcement came alongside the RBI's policy decision to cut the repo rate by 50 basis points to 5.5%, its third consecutive reduction. The CPI inflation outlook for FY26 was revised to 3.7%, while the GDP growth forecast was retained at 6.5%. Muthoot Finance, a key player in India's gold loan market, rallied from its previous close of ₹2,294.60, recording an intraday high of ₹2,448.80 with strong volume activity. With a market cap nearing ₹945 billion, the stock has become a central beneficiary of the revised norms. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Upturn
2 days ago
- Business
- Business Upturn
Explained: What does the RBI decision of revising Gold Loan LTV to 85% from 75% means
In a key announcement during the RBI monetary policy press conference, Governor Sanjay Malhotra stated that the Loan-to-Value (LTV) ratio for gold loans up to ₹2.5 lakh per borrower will be revised to 85% from the existing 75%, including the interest component. Simply put, if you pledge gold worth ₹1 lakh, you can now borrow up to ₹85,000 instead of ₹75,000 earlier. This move is aimed at enhancing liquidity access for small borrowers, particularly in rural and semi-urban areas where gold loans are a common form of short-term credit. What is LTV and why does it matter? The Loan-to-Value ratio refers to the proportion of a loan that can be disbursed against the value of the collateral—in this case, gold. A higher LTV allows borrowers to access a larger amount of funds without needing to pledge more gold. This makes borrowing more accessible and efficient, especially in times of emergency or financial stress. With the LTV cap now raised to 85%, borrowers will have more flexibility and headroom to meet their credit needs without turning to informal lending sources. Why did RBI change the rule? RBI Governor Sanjay Malhotra clarified that the LTV revision is part of a broader push to standardize and streamline gold loan regulations, particularly for small-ticket loans. Key highlights from his remarks include: Final guidelines on gold loan regulations will be issued today or latest by Monday. The existing draft was not new , but a reiteration of past directions , aiming to resolve non-compliance by some lenders. Credit appraisal requirements will be removed for gold loans up to ₹2.5 lakh. End-use monitoring will only be required under Priority Sector Lending (PSL) norms. Market response: Gold loan financiers surge The announcement triggered sharp gains in shares of key gold loan NBFCs: Muthoot Finance Ltd. surged up to 8% Manappuram Finance Ltd. rose nearly 5% IIFL Finance Ltd. gained around 5% What does it mean for lenders? For gold loan financiers, the revised LTV expands their lending potential without needing new customers, as they can now lend more against the same value of gold. This is expected to grow their loan books, improve margins, and enhance customer retention. The removal of credit appraisal for small loans also reduces operational overhead and streamlines disbursal processes, leading to faster turnaround times and better service efficiency. In short, the regulatory easing is a win-win for both lenders and borrowers—borrowers get more credit access, and lenders unlock greater business potential within existing regulatory boundaries. In summary: The RBI's decision to raise the LTV ratio for small gold loans brings easier, quicker, and higher access to credit for borrowers, while opening up significant growth opportunities for gold loan lenders by enabling larger disbursements, reduced processing time, and expanded loan books. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Standard
3 days ago
- Business
- Business Standard
Muthoot Finance Ltd soars 1.04%, rises for fifth straight session
Muthoot Finance Ltd is quoting at Rs 2296, up 1.04% on the day as on 12:44 IST on the NSE. The stock is up 30.96% in last one year as compared to a 8.75% spurt in NIFTY and a 20.69% spurt in the Nifty Financial Services. Muthoot Finance Ltd is up for a fifth straight session in a row. The stock is quoting at Rs 2296, up 1.04% on the day as on 12:44 IST on the NSE. The benchmark NIFTY is up around 0.8% on the day, quoting at 24817.95. The Sensex is at 81630.86, up 0.78%. Muthoot Finance Ltd has risen around 2.13% in last one month. Meanwhile, Nifty Financial Services index of which Muthoot Finance Ltd is a constituent, has risen around 1.76% in last one month and is currently quoting at 26264.55, up 0.61% on the day. The volume in the stock stood at 1.94 lakh shares today, compared to the daily average of 11.23 lakh shares in last one month. The benchmark June futures contract for the stock is quoting at Rs 2305.9, up 1.17% on the day. Muthoot Finance Ltd is up 30.96% in last one year as compared to a 8.75% spurt in NIFTY and a 20.69% spurt in the Nifty Financial Services index. The PE of the stock is 17.56 based on TTM earnings ending March 25.
Yahoo
15-05-2025
- Business
- Yahoo
Muthoot Finance Ltd (BOM:533398) Q4 2025 Earnings Call Highlights: Record Loan Growth and ...
Release Date: May 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Muthoot Finance Ltd (BOM:533398) achieved its highest-ever consolidated loan amount of 120,000 crores as of March, with a year-on-year growth in assets under management (AUM) of 37%. The company reported a consolidated profit after tax of 5,352 crores, marking a 20% increase year-on-year. Muthoot Finance Ltd (BOM:533398) declared a dividend of 260% of the face value, or INR 26 per equity share. The company opened 850 new branches during the year, expanding its reach significantly. S&P Global and Moody's upgraded Muthoot Finance Ltd (BOM:533398)'s credit ratings, reflecting improved financial stability and outlook. The company faces potential regulatory challenges with new draft guidelines on gold lending, which could impact loan-to-value (LTV) ratios and operational costs. There is increased competition in the gold loan market, with more players entering the sector, which could pressure margins. The company's credit costs have risen, partly due to non-gold loan portfolios, which could affect profitability. Operational and compliance costs are expected to rise due to new regulatory requirements, potentially impacting overall cost efficiency. There are concerns about the impact of new regulations in regions like Tamil Nadu, which could affect collections and operational dynamics. Warning! GuruFocus has detected 8 Warning Signs with BOM:533398. Q: How does Muthoot Finance view gold loan growth for the upcoming year, considering the strong performance in the past two years and the competitive landscape? A: Mr. George Alexander Muthoot, Managing Director, stated that the company maintains a conservative growth guidance of 15% for the upcoming year, despite achieving a 41% growth last year. He acknowledged the increasing competition but noted that the market is expanding, allowing room for growth for both existing and new players. Q: What is Muthoot Finance's stance on the draft gold lending guidelines, particularly regarding the Loan-to-Value (LTV) ratio? A: Mr. George Alexander Muthoot explained that the company, along with other industry players, has submitted suggestions to the regulator regarding the draft guidelines. The company is concerned that the proposed LTV changes could disadvantage NBFCs and potentially drive customers back to unorganized money lenders. They await the final guidelines and hope for a resolution that supports the organized sector. Q: Can you provide insights into the credit costs and asset quality, particularly the stage 3 loans in the gold and non-gold loan portfolios? A: The CFO, Mr. Oman Khaman, detailed that stage 3 loans in the gold loan portfolio amount to approximately 3,400 crores, while non-gold loans account for about 300 crores. The credit costs have been slightly elevated due to provisions for non-gold loans, but the company expects stabilization in collections. Q: How does Muthoot Finance plan to handle branch expansion, and are there any regulatory constraints? A: Mr. George Alexander Muthoot mentioned that the company has approval to open 115 new branches this year. The expansion will occur in both Muthoot Finance and Muthoot Money, with no significant regulatory constraints anticipated. The focus remains on growing the business through strategic branch openings. Q: What are the expectations for yields and interest spreads in the coming year, considering the competitive environment and potential interest rate changes? A: Mr. George Alexander Muthoot stated that the company aims to maintain an interest spread between 9% and 10%. If borrowing costs decrease, the company plans to pass on the benefits to customers by reducing rates, while any increase in borrowing costs will be absorbed initially before adjusting rates. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
