Muthoot Finance Hits Record High As Gold Loan Stock Continue To Rise
Muthoot Finance will likely be benefitted the most because the lender has 63% of its loan book below Rs 3 lakh.
Muthoot Finance Ltd.'s share price hit a record high, and IIFL Finance Ltd. emerged as a top gainer among gold loan stocks. These stocks are continuing their rally as the Reserve Bank of India raised the loan-to-value ratio for lending against gold to small borrowers with a ticket size of up to Rs 2.5 lakh to 85% from 75% earlier.
Muthoot Finance will likely benefit the most because the lender has 63% of its loan book below Rs 3 lakh.
Positive sentiment for gold loan companies after RBI revised the loan-to-value (LTV) ratio for gold loans under Rs 2.5, said Vikas Jain, head of research at Reliance Securities.
The move is to take effect after the Department of Financial Services suggested exempting borrowers availing loans under Rs 2 lakh.
The market cap of these stocks advanced Rs 3,250.40 crore to Rs 14.42 lakh crore as of 10:16 a.m.
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IIFL Finance Ltd. share price rose the most compared to other stocks. The share price rose 5.42% to Rs 475.20 apiece, the highest level since June 9. The share price has been rising for five days in a row.
Muthoot Finance Ltd. rose 3.34% to a record high of Rs 2,527.80 apiece. The stock rose for seven sessions in a row.
Manappuram Finance Ltd.'s share price rose 2.60% so far in Monday's session.
Meanwhile, Axis Gold fell 3.39% to Rs 79 apiece so far today.
