Why does Bloomberg expect Manappuram and Muthoot to gain from the recent gold loan trends?
Answer
Answer
Gold loan companies are cutting tenors and seeking additional collateral due to fall in price of gold. Average tenor has come down from 270 days to 90 days. Also, gold loan sanctions have been cut from 90% of LTV to 75% of LTV after gold fell 9% in the Mar-21 quarter. Bloomberg expects more business to gravitate to the leaders like Muthoot and Manappuram with stronger balance sheets and already low LTV lending practices.