Another non-bank lender, Poonawalla Fincorp Ltd., has announced the launch of its gold loan business on Tuesday and it plans to strengthen its presence across tier-2 and tier-3 cities.
Poonawalla Fincorp plans to open 400 new branches in a phased manner over the next four quarters, to increase its presence in the gold loan business
“With faster approvals in less than 30 minutes, minimal documentation, and multiple repayment options, customers can unlock the value of their gold without selling it – ensuring financial flexibility while preserving long-term wealth,” Poonawalla Fincorp said in its exchange filing on Tuesday.
Gold loan companies were in action last week as well, after the Reserve Bank of India announced draft gold loan norms.
As per the draft rules, the Loan-to-Value (LTV) ratio is capped at 75%, while the tenure for bullet payments is capped at 12 months. The draft rules also propose NBFCs to set limits on gold loan portfolios.
Shares of Manappuram Finance are currently in the F&O ban, which means no new positions can be created in the stock.
Kotak Institutional Equities had downgraded shares of Muthoot Finance last Friday to “Add” from its earlier rating of “buy” and cut its price target to ₹2,250 from ₹2,400 earlier.
Shares of Muthoot Finance are down 13% in the last one month, while those of Poonawalla Fincorp have gained 20% over the same period, having risen another 4% last Friday.
