Last Updated:June 10, 2025, 11:05 IST
Muthoot Finance’s share price continued its upward momentum on Tuesday, marking an eighth consecutive session of gains
Muthoot Finance Share Price
Muthoot Finance Share Price: Muthoot Finance’s share price continued its upward momentum on Tuesday, marking an eighth consecutive session of gains. The stock climbed 1.20% to a record high of Rs 2,570.65 on the BSE, supported by sustained buying interest.
The gold loan financier’s shares have surged 24.6% in just eight sessions, pushing its market capitalization beyond the Rs 1 lakh crore mark. The rally comes amid broader gains in gold NBFC stocks, including Manappuram Finance and IIFL Finance, after the Reserve Bank of India (RBI) recently relaxed rules for small-ticket gold loans.
On Friday, the RBI issued final guidelines on gold loans, easing the Loan-to-Value (LTV) ratio for loans under Rs 2.5 lakh to 85% from the earlier 75%. However, for loans above Rs 5 lakh, the LTV cap remains unchanged at 75%, including interest. The LTV ratio measures the maximum loan amount a borrower can get based on their gold’s value.
Analysts see the final guidelines as a positive development, offering much-needed flexibility to gold financiers. Unlike the draft proposals, the final guidelines do not mandate provisioning in case of LTV breaches, requiring only that lenders outline corrective actions in their credit policy.
Avinash Singh, Senior Research Analyst at Emkay Global Financial Services Ltd, said:
“The RBI has tightened renewal rules—borrowers must repay interest and meet credit checks before renewal or top-up. Lenders must also clearly disclose all charges, including gold assaying and auction fees, in loan documents. This move promotes greater prudence, transparency, and borrower protection, benefiting all NBFCs, especially gold loan providers.”
Jefferies’ View on Muthoot Finance
Jefferies has identified Muthoot Finance as its top pick in the sector, setting a price target of Rs 2,660 per share—about 4% above the current level despite a 44% rise over the past year. The target is based on 2.6x P/BV (June FY27) for the standalone business and 0.8x P/B for the MFI subsidiary, with additional assumptions for the housing subsidiary and insurance broking arm.
Jefferies believes the regulatory relaxations will boost growth and reduce operational expenses, easing key concerns and supporting margins. However, the brokerage also warned of potential risks, including gold price declines, slower growth, higher NIM pressure, and increased credit losses.
Muthoot Finance’s Stock Performance
Muthoot Finance shares have delivered strong returns: up 15% in the past month, 26% in six months, and 46% in a year. Over two years, the stock has gained 130% and 165% over five years.
As of 10:15 AM, Muthoot Finance shares were trading 0.79% higher at Rs 2,560 on the BSE.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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