KOCHI: Manappuram Finance’s gold-loan portfolio nearly doubled in FY26, but the quantity of gold pledged against the loans increased by only about 12 per cent, highlighting the impact of the sharp rise in gold prices on the company’s gold-loan book.
The gold-loan AUM of Manappuram Finance increased 99.1 per cent during FY26. In contrast, the quantity of gold underlying the portfolio rose from 56.36 tonnes as of March 31, 2025 to 63 tonnes a year later — an increase of about 12 per cent.
The sharp divergence coincided with a roughly 65 per cent increase in gold prices during FY26.
CARE Ratings, in its latest rating assessment of the company, said the rise in gold prices resulted in an increase in the quantum of higher-ticket-size loans.
The change has significantly increased the importance of gold loans to Manappuram’s overall business. Gold loans accounted for about 80 per cent of the company’s consolidated AUM as of March 31, 2026, compared with 59 per cent a year earlier.
Gold loan drives growth
This also means that the company’s growth is becoming increasingly dependent on the gold-loan business. Its non-gold portfolio accounted for only 20 per cent of consolidated AUM at the end of FY26, compared with 41 per cent a year earlier.
CARE Ratings has flagged exposure to gold-price risk as a key constraint on the company’s rating.
With 99 per cent of the gold-loan portfolio carrying a one-year tenure, the rating agency said Manappuram’s ability to keep auction losses under control would remain a key monitorable.
The rating agency also noted that the company faces increasing competition from banks in the gold-loan business, while its ability to attract new customers remains critical to sustaining AUM growth.
For Manappuram, therefore, the sharp increase in gold prices has had a dual effect: it has allowed larger loans to be extended against the same underlying asset base, while simultaneously increasing the company’s exposure to movements in the value of the collateral.
