Muthoot Finance Ltd, India’s largest gold loan non-banking finance company, is targeting around 15% growth in assets under management (AUM) this year, supported by continued demand for household gold loans and expansion across subsidiaries.
“For the last 10 years, we have been giving a guidance of 15% in first quarter. In the next two quarters, we will see how it is panning out and probably revise it,” said Managing Director George A. Muthoot said during earnings call.
Gold import curbs unlikely to impact business
According to George Muthoot, the Centre’s move to discourage gold imports and the increase in import duty from 6% to 15% due to the geo-political crisis and its impact on forex, would not affect the company’s core business.
“We do not finance any gold or bullion purchase. It actually does not affect Muthoot. We finance only the household used ornaments of the public,” he said.
He added that India has an estimated 25,000-30,000 tonnes of household gold, offering significant long-term growth opportunities for the gold loan business despite restrictions on fresh imports.
AUM rises 49%
The consolidated AUM of Muthoot Finance and its subsidiaries stood at ₹1,81,916 crore, registering growth of around ₹59,000 crore or 49% over the previous year.
Consolidated net profit rose 98% to ₹10,607 crore.
Subsidiaries expand gold loan operations
Belstar Microfinance, which entered the gold loan business, disbursed ₹7,500 crore compared with ₹6,000 crore last year.
The company opened 81 gold loan branches during the year and plans to add another 200 branches this year. Its total network, including microfinance operations, now stands at 1,300 branches. Collection efficiency improved to 99.85% from 99.16%.
Home finance and vehicle finance businesses grow
Muthoot Home Finance reported AUM growth to ₹3,485 crore from ₹2,900 crore, while loan disbursements stood at ₹999 crore. Interest income increased 36% and net profit rose to ₹45 crore. Gross NPA stood at 2.63% and net NPA at 1%.
Muthoot Money has gradually shifted focus from vehicle finance to gold loans. Its gold loan AUM increased sharply to ₹9,794 crore from ₹3,900 crore following a ₹1,000-crore capital infusion from parent Muthoot Finance.