The loan against securities (LAS) business, which typically involves disbursal of huge amount of money by banks and shadow lenders against shares, mutual funds and bonds, has seen a rising interest from brokerages, wealth managers, fintech aggregators and specialists.
The increased pledging volume by India’s rising urban investors (HNIs) and corporate honchos is leading the trend, said market experts. New types of securities, including exchange-traded-funds and ESOPs, are also driving up volumes.
This helped Rurash Financials, a nascent Mumbai-based LAS firm, to clock revenue of Rs 25 crore in 2025, from Rs 7 crore in 2023. It is now “planning an initial public offering (IPO) valued between Rs 500 crore and Rs 1,000 crore,” said MD and CEO Ranjit Jha. IPO advisors – Pantomath and HEM Securities – are being consulted for the issue.
Expanding client base of the LAS industry
The firm’s success story reflects the vastly expanding client base of the LAS industry. Equirus Group, a financial services firm that last week received approval from the Reserve Bank of India to launch shadow bank Equirus Finance, targets HNIs in LAS.
Digital players such as M2P Fintech and Quicklend also offer the crisp product.
Fintech firms and specialists have begun facilitating LAS deals of up to ₹100 crore to HNIs and business houses by acting as aggregators across multiple lenders. Digital onboarding and a larger list of eligible securities are their forte versus traditional lenders.
“The product is popular for unlocking liquidity while retaining asset ownership in a transparent and methodical way,” said the head of a brokerage, whose LAS business has significantly expanded. The processing speed and lower risk-adjusted rates are boosting the product.
Traditional players have large market share. According to State Bank website, the interest on loan against mutual funds is 11.3%. Tata Capital charges 8% to 20% for LAS, Axis Bank 11% to 13.75% and Kotak charges 8% to 11%. ICICI Bank quotes loan processing charge of up to 2% of the amount, Rs 2,500 plus GST for renewal and Rs 5,000 plus taxes to sell securities. All these charges are non-refundable.
“You may add more securities to the same loan to increase drawing power of your account, provided they are eligible,” said aggregator Paisabazaar.com.
Loss of securities
LAS disbursals are typically 50% to 95% of the collateral value. The risk is the loss of securities on default. While traditional business loans are based on income or cash flow, LAS comes handy during urgent requirements. Another main feature of LAS is HNIs who pledge shares short term to bid for IPOs or to trade.
The Securities and Exchanges Board of India (Sebi) periodically reviews and refines rules with regard to reporting, margin and end-use to mitigate systemic risks from LAS.
Conventionally a brokerage, Sharekhan, is now a major LAS player, offering high-value loans and flexible tenures. Mirae Asset Sharekhan Financial Services specialises in loans and credit facilities under ESOP funding.