The Reserve Bank of India (RBI) has announced new rules for gold loans, which are easier than what was planned earlier. These rules mainly help people take smaller loans, and Morgan Stanley has picked these two Gold Financing companies as its Top pick.
What is the New Gold Loan Update
The new rules for gold loans have made borrowing more accessible, especially for smaller borrowers. For loans up to Rs. 2.5 lakh, borrowers can now receive up to 85 percent of the gold’s value, including interest, compared to the earlier cap of 75 percent. Loans between Rs. 2.5 lakh and Rs. 5 lakh will have a maximum limit of 80 percent, while loans above Rs. 5 lakh will continue to have a 75 percent cap.
Additionally, small-ticket loans of Rs. 2.5 lakh or less will not require detailed credit checks, and lenders are no longer required to monitor how the borrowed funds are used.
Moragn Stanley Picks
Morgan Stanley has picked Muthoot Finance and Manappuram Finance as the Key beneficiaries for the new gold loan norms. It also believes that Shriram Finance and Bajaj Finance stand to benefit from the revised regulations. For Muthoot and Manappuram Finance, it has an Equalweight rating, and for Shriram and Bajaj Finance, it has an Overweight rating.
Morgan Stanley further states that as Muthooth Finance has given strong guidance for FY26, it can rally further from current levels. However, Manappuram Finance has a headwind of Bain Capital’s open offer for the stock at Rs. 236 per share
With a market capitalisation of Rs. 1,01,442 Crore, the stock of Muthoot Finance opened at Rs. 2,479.70, up 1.34 percent from yesterday’s close, and after opening, it made a high of Rs. 2,547.65, up 4.12 percent. Additionally, the Yearly return for the stock is 44 percent, and the past 5-year return is an impressive 158 percent.
With a market capitalisation of Rs. 21,648 Crore, the stock of Manappuram Finance opened at Rs. 249.90, up 0.92 percent from yesterday’s close, and after opening, it made a high of Rs. 255.95, up 3.37 percent. Additionally, the Yearly return for the stock is 44 percent, and the past 5-year return is 75 percent.
Written By Abhishek Das
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