Shares of gold financing firms - Manappuram Finance and Muthoot Finance are trading higher by over 7%, extending their previous day’s 20% rally after the Reserve Bank of India (RBI) has revised upwards loan-to-value (LTV) norm for non-banking finance companies (NBFC) engaged in gold loans from 60% to 75%.
The development is positive for gold loan companies like Muthoot Finance and Manappuram Finance, as earlier norm of 60% LTV had resulted in moderation of loan books for these companies.
It also appears that regulator is now comfortable with the loan books of these NBFCs and wants them to play an active role in monetisation of idle gold in the country, says analyst at Angel Broking in a note.
Among the individual stocks Manappuram Finance has surged 16% to Rs 21.10, while Muthoot Finance by 7% at Rs 138 on the Bombay Stock Exchange.
The development is positive for gold loan companies like Muthoot Finance and Manappuram Finance, as earlier norm of 60% LTV had resulted in moderation of loan books for these companies.
It also appears that regulator is now comfortable with the loan books of these NBFCs and wants them to play an active role in monetisation of idle gold in the country, says analyst at Angel Broking in a note.
Among the individual stocks Manappuram Finance has surged 16% to Rs 21.10, while Muthoot Finance by 7% at Rs 138 on the Bombay Stock Exchange.
