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Gold loan book may see a correction in H1; expect 20-25% industrial growth: Indel Money

The company currently has assets under management (AUM) of Rs 650 crore and expecting a growth of 30 percent.

April 04, 2021 / 06:03 PM IST

The book size might take a correction in terms of value in H1 as gold prices correct. At the same time, we do anticipate an industrial growth of 20-25 percent minimum in terms of weight, Umesh Mohanan, Executive Director & CEO, Indel Money said in an interaction with Moneycontrol.

The Kerala-based NBFC currently had assets under management (AUM) of Rs 650 crore and is expecting a growth of 30 percent.

Edited excerpts:

Q. As the gold prices have fallen to Rs 45,000 level, are you seeing the offtake of gold loans slowing down? If no, why? If yes, why?

A. The price of gold and offtake of gold loans are sparsely related as the recent hike in offtake has been a residual effect of the lack of required credit growth in the banking sector.

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Q. What is the gold loan growth in Q4 of FY21 in comparison to the same quarter of FY20?

A. Rs 280 crore disbursement last year Q4, Rs 420 crore this year Q4.

Q. How as a company are you addressing the issue?

A. The first and foremost thing is that we work on a very transparent contract with our borrowers, which clearly depicts and we thoroughly educate them on the trigger points related to margin call and auction points. Also, we have set our point of margin call and the point of the auction in correlating the TOS on the loan and the current metal price which is being watched under our robust daily account to account "Mark to Market'' monitoring system.

Q. What is your outlook on gold loan for FY22?

The book size might take a correction in terms of value in H1 as the correction in gold prices and at the same time, we do anticipate an industrial growth of 20-25% minimum in terms of weight 

Q. What is your current AUM? What sort of growth are you expecting in FY22?

We are currently under an AUM of Rs 650 crore and we are expecting a growth of 30 percent.
Sandeep Sinha
first published: Apr 4, 2021 06:03 pm

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