India’s gold loan specialist Manappuram Finance has made two significant moves that signal an ambitious growth strategy for the coming years. In a filing with the Bombay Stock Exchange, the Kerala-based non-banking financial company (NBFC) announced a substantial increase in its borrowing limit alongside a key leadership appointment.
The company’s board has approved raising its borrowing ceiling to Rs 75,000 crore (approximately $9 billion), a 50% increase from its previous limit of Rs 50,000 crore. This expanded capacity suggests Manappuram is positioning itself for accelerated lending activities and portfolio expansion as India’s economy continues its robust growth trajectory.
Alongside this financial maneuver, Manappuram revealed the appointment of Ramesh Periasamy as its new Group Chief Financial Officer, effective immediately. Periasamy brings considerable experience in financial services, having previously served as CFO at Asirvad Microfinance, a subsidiary within the Manappuram group.
“The board’s approval to enhance the borrowing powers reflects our confidence in the company’s growth prospects and our commitment to serving India’s credit needs,” said VP Nandakumar, Managing Director and CEO of Manappuram Finance, in a statement accompanying the filing.
Financial analysts view these twin developments as part of a coordinated strategy to strengthen the company’s market position in an increasingly competitive landscape. “This substantial increase in borrowing capacity indicates Manappuram is preparing for significant balance sheet expansion,” noted Rajiv Mehta, Executive Director at Yes Securities. “The appointment of an internal candidate as Group CFO suggests they’re prioritizing continuity while pursuing an aggressive growth plan.”
Founded in 1992, Manappuram Finance has grown from a small regional player to become one of India’s leading gold loan companies. The firm has diversified beyond its core gold loan business to include home and vehicle finance, microfinance, and insurance broking services. Its extensive branch network spans over 4,600 locations across 28 states and union territories.
The company’s stock has shown resilience amid broader market volatility, gaining 6.2% year-to-date on the BSE. This performance outpaces the 3.8% advance in the broader financial services index during the same period, according to data from Bloomberg.
The increased borrowing limit comes at a strategic moment for India’s NBFC sector. The Reserve Bank of India (RBI) has maintained a relatively accommodative stance on monetary policy despite inflationary pressures, with the repo rate holding steady at 6.50% since February 2023. This stable interest rate environment creates favorable conditions for NBFCs to expand their loan books.
“Manappuram’s move to raise its borrowing ceiling indicates confidence in sustained demand for credit, particularly in semi-urban and rural markets where gold loans provide vital financial inclusion,” said Saurabh Mukherjea, founder of Marcellus Investment Managers, in a recent investor note.
The company reported consolidated assets under management of Rs 39,327 crore as of March 31, 2023, representing a 24% year-over-year increase. Gold loans constitute approximately 67% of its loan portfolio, with the remainder spread across microfinance, vehicle loans, and housing finance.
Periasamy’s appointment comes at a pivotal time for the company’s financial management. His experience at Asirvad Microfinance, where he oversaw financial operations during a period of rapid growth, positions him to help navigate Manappuram’s expanded funding activities.
“The CFO transition appears seamless, with Periasamy already familiar with the group’s operations and strategic direction,” observed Deepak Jasani, Head of Retail Research at HDFC Securities. “This continuity in financial leadership is crucial given the ambitious expansion implied by the higher borrowing limit.”
Industry experts also note that gold loan companies like Manappuram are uniquely positioned in India’s financial landscape. With gold playing a central role in Indian households’ savings strategy—the country is the world’s second-largest consumer of gold—these lenders can tap into a vast pool of physical assets that many Indians are willing to pledge as collateral.
The World Gold Council estimates that Indian households hold approximately 25,000 tonnes of gold, worth over $1.5 trillion. This enormous stockpile provides substantial runway for growth in the gold loan segment, where Manappuram competes with other major players like Muthoot Finance.
As Manappuram Finance implements these strategic changes, investors and industry observers will be watching closely to see how the company deploys its expanded borrowing capacity and whether the new financial leadership can deliver on the implied growth ambitions. With India’s economy projected to grow at 7.2% in fiscal year 2024 according to the International Monetary Fund, the stage is set for continued expansion in the country’s financial services sector.
