Muthoot Finance shares surged nearly 7% after the Finance Ministry proposed exempting small borrowers from new gold loan rules. Learn why this could benefit the company and what the new rules mean.
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Muthoot Finance Ltd.’s share price increased by nearly 7% after the Finance Ministry made a suggestion to the Reserve Bank of India (RBI). The ministry proposed that small borrowers, who take gold loans of less than Rs 2 lakh, should not have to follow the new draft gold loan rules. This news is exciting for Muthoot Finance because 63% of their loans are below Rs 3 lakh, making them a major beneficiary if these changes happen.
What Are the New Gold Loan Rules?
The RBI’s draft rules ask gold loan companies to:
- Keep the loan-to-value ratio (how much loan you get compared to the value of your gold) at 75% or less during the entire loan period.
- Limit the amount of gold loans in their portfolio.
The Finance Ministry also suggested that these rules should start from January 2026, giving companies more time to prepare.
The share price of Muthoot Finance jumped 6.90% to Rs 2,207.70, the highest since May 15. By 11:24 a.m., it was trading 6.54% higher at Rs 2,200.90, while the NSE Nifty 50 index fell by 0.25%. Over the past year, the stock has risen by 31.51%, and this year, it’s up by 3.05%. The trading volume was 4.5 times higher than the average over the last 30 days, and the relative strength index was at 54.87.
Analyst Opinions on Muthoot Finance
Out of 25 analysts following the company:
- 15 recommend “buy.”
- 6 suggest “hold.”
- 4 advise “sell.”
The average price target set by analysts suggests the stock could rise by 10% over the next 12 months, according to Bloomberg data. – Best mcx tips provider in india
