New NBFC entrants intensify competition in India’s gold-loan market
Tata Capital, Aditya Birla Capital, L&T Finance, Shriram Finance and Godrej Capital are scaling gold-loan branches and books, increasing network and pricing pressure on incumbents Muthoot Finance and Manappuram. The market is projected to exceed ₹30 lakh crore by March 2028.
What happened
Muthoot Finance · Corporate-backed NBFCs including Tata, Aditya Birla, L&T, Shriram and Godrej are expanding into India’s fast-growing gold-loan market, raising
Key facts
- India gold-loan market: ₹18.6 lakh crore as of March 2026
- Segment grew nearly four-fold in five years
- Projected 28% CAGR over FY26-FY28
- Market projected to exceed ₹30 lakh crore by March 2028
- Aditya Birla Capital targets 1,000 gold-loan branches in three years
- L&T Finance plans 500 dedicated gold-loan branches annually for four to five years
- Shriram Finance targets a ₹20,000 crore gold-loan book and 500 additional branches
- Shriram currently offers gold loans through 2,000 branches
- Banks hold 75% of the market; NBFCs hold 12%
- Muthoot Finance gold-loan yield fell 300 bps sequentially to 17.93% in Q1
Why this matters
The land grab makes partnerships or acquisitions involving regional gold-loan originators, appraisal infrastructure and digital underwriting capabilities increasingly strategic.
What to watch
- Quarterly gold-loan AUM growth and new-branch openings at Aditya Birla Capital, L&T Finance, Shriram Finance, Tata Capital and Godrej Capital.
- Yield, net interest margin and operating-expense trends at Muthoot Finance and Manappuram.
- Changes in advertised interest rates, processing fees, loan-to-value caps and renewal terms across major lenders.
- Gold-price volatility, auction volumes, loan-loss provisions and overdue ratios, particularly among newer portfolios.
- RBI guidance on NBFC gold-loan underwriting, collateral valuation, auction practices and exposure limits.
- Evidence that entrants are meeting stated scale targets: 1,000 Aditya Birla branches, 500 annual L&T dedicated branches and Shriram's ₹20,000 crore book target.
- Entrants will concentrate dedicated gold-loan branches in high-gold-ownership southern and western states, then extend into tier-2 and tier-3 clusters.
- Tata Capital, Aditya Birla Capital and Godrej Capital are likely to bundle gold loans with consumer, MSME, insurance and digital-finance products to lower acquisition costs.
- Incumbents Muthoot Finance and Manappuram may respond with selective rate cuts, doorstep servicing, faster digital renewals and loyalty offers for repeat borrowers.
- L&T Finance and Shriram Finance will likely prioritize portfolio scale through branch-led sourcing, dealer/referral networks and cross-sell from existing rural and vehicle-finance customer bases.
- Competition may accelerate hiring of gold appraisers, branch managers and auction/collections specialists, lifting sector-wide employee and compliance costs.