Manappuram Finance, Muthoot Finance slip upto 3% after RBI tightens rules for gold financiers

Shares of Manappuram Finance are down over 5 percent for the past month, while those of Muthoot Finance and IIFL Finance have posted minor gains of around 3 percent and 1 percent.

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26 Aug, 2025 12:21

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Shares of Manappuram Finance and Muthoot Finance slipped upto 3 percent in trade on October 1, a day after the Reserve Bank of India directed gold financiers to review processes, identify lapses and take remedial measures within three months, which according to brokerages may weigh on their growth. This comes after the RBI flagged irregular practices at certain gold finance companies in relation to loans issued against pledged gold ornaments and jewellery.

While Jefferies does believe that these tighter processes may hamper growth for gold financiers, it feels large gold non-bank finance lenders like Muthoot Finance should be better placed.

Morgan Stanley seconded the view and added that rival Manappuram Finance is also better positioned after being regulated for a long period in the past.

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Between the two however, Morgan Stanley sees better margin of safety in Manappuram, backed by the cheaper valuations of the stock. Meanwhile, Jefferies stated that IIFL Finance should remain unaffected by the RBI's measures as it has already taken corrective measures. Likewise, at 11.21 am, shares of IIFL Finance were trading over 1 percent higher on the NSE at Rs 468.40.

Regardless, Morgan Stanley did not rule out some overhang on these stocks due to the RBI's tightening the norms for gold financiers. Accordingly, shares of Muthoot Finance tumbled 3.5 percent to Rs 1,961.55 while Manappuram Finance was down over 2 percent at Rs 196.60 on the NSE.

Despite the surge in gold prices to record high levels, shares of gold financiers have still witnessed muted performances in the near past. While shares of Manappuram Finance are down over 5 percent for the past month, those of Muthoot Finance and IIFL Finance have only posted minor gains of around 3 percent and 1 percent during the period.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.