Gold loan-focused NBFC Muthoot Fincorp is diversifying its offerings to include mortgage products and digital lending, aiming to boost the non-gold segment to one-fifth of its total assets, according to chief executive Shaji Varghese.
The flagship company of 137-year-old Muthoot Pappachan Group, Muthoot Fincorp has traditionally focused on gold lending to lower- and middle-income families. It is now keen on growing loans against property (LAP) and digital lending to small and medium enterprises.
“Directionally, we are moving from a single-product (gold loan) to a multi-product company,” Varghese said.
Muthoot Fincorp’s total assets under management grew 35% year-on-year to ₹27,043 crore as of Q2FY25. Gold loans, which once comprised over 95% of total assets, now account for 87%.
Varghese said the company disburses over ₹200 crore monthly under LAP. Its digital lending pilot, in collaboration with PhonePe and BharatPe, is now disbursing ₹100 crore per month. “If the current trend continues, our asset mix will be 80:20 between gold and non-gold in two-three years.” Gold loans, however, will remain the flagship product.
On recent fluctuations in gold prices, Varghese said the company’s loan-to-value ratio is 64%, below the regulatory cap of 75%, providing sufficient cushion against temporary price changes. “Under no circumstances are we exposed to a situation where our assets are not covered due to price fluctuations.”
Muthoot Fincorp currently operates over 3,700 branches, primarily in southern and central India. The company is looking to expand its branch network into northern states, including Uttar Pradesh, Bihar and Rajasthan. “Branch expansions are regulated by the RBI. Last year, we received licences to open 200 branches and we are executing these expansions,” Varghese said.
On the company’s reported IPO plans, Varghese said current accruals and profits are sufficient to fund the business growth. “We don’t have any immediate plans for equity fundraising.”
On a consolidated basis, Muthoot Fincorp’s AUM stood at ₹41,873.15 crore in the September quarter. This includes assets from its listed microfinance subsidiary Muthoot Microfin and home loan subsidiary Muthoot Housing Finance.