Gold loans to pick up pace in Q2: Manappuram Finance
Wednesday, June 02, 2021Financial Express
Gold loan business is expected to gather pace in the second quarter of the fiscal with the gradual unlocking of the economy, according to leading gold loan lender Manappuram Finance.
VP Nandakumar, MD & CEO of Manappuram Finance, said there could be a slight decline in the gold loan portfolio of the NBFC in the first quarter before demand gathers momentum. The NBFC expects growth to be in the range of 10-15% for the complete fiscal, with fewer loan defaults compared to FY21.
Gold loan portfolio declined quarter-over-quarter by 5.61% to Rs 19,077.05 crore in Q4, from Rs 20,211.58 crore reported in Q3 FY21. The lender had to auction almost 1.2 tonne of gold worth Rs 412 crore in FY21, with bulk of the recovery happening in the fourth quarter.
Gold prices fluctuated by almost 24.7 % in the last fiscal from a high of Rs 5,250 per gram to Rs 3,950 per gram. Nandakumar said gold prices can only go up from the current level given the global economic scenario, and defaults will be significantly lower than last fiscal.
“The auction in FY21 was one of the lowest when you compare it with FY17, when 3.8 tonne of gold worth Rs 929 crore was auctioned. In FY21, the auction was only 2.16% of the total gold assets under management, while in FY17 it was 8.35% and in FY18 it was 7.7%,” he said.
