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Shares in gold loan providers surge on RBI report proposals

Jan 03 2013, 11:12 IST
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Shares in gold loan providers soar after a central bank report proposed increasing the loan-to-value, or LTV, ratio to 75%. (Reuters) Shares in gold loan providers soar after a central bank report proposed increasing the loan-to-value, or LTV, ratio to 75%. (Reuters)
SummaryShares in gold loan providers soar after a central bank report proposed increasing the loan-to-value, or LTV, ratio to 75%.

Shares in gold loan providers such as Manappuram Finance soar after a central bank report proposed increasing the loan-to-value, or LTV, ratio to 75 percent from 60 percent currently.

The ratio is an important tool that can vary the quantity of gold loans which a company can provide to customers.

"The proposals to increase LTV and to use cheques for high-value transactions are positive, but a cap on lending rates and restrictions on NCD (non-convertible debentures) will affect gold-loan NBFCs' profitability," Kotak Securities said in a note.

Muthoot Finance shares up 9 percent, while Manappuram Finance rises 16 percent.

Shares in Titan Industries, which makes gold jewellery, are down 1 percent on concerns over rising costs after the government says it will make importing gold costlier.

Stocks More on Manappuram Finance

Company INFO More on Muthoot Finance

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