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Gold loan stocks rally after import duty hike on gold, silver
(13-May-26 16:27)
Manappuram Finance surged 6.16%, while Muthoot Finance gained 4.96%. Shares of IIFL Finance climbed 4.31%.
The government has increased import duty on gold and silver to 15% from 6%, a move aimed at curbing imports and supporting the rupee. The higher duty structure pushed domestic gold prices higher, increasing the value of jewellery pledged as collateral for loans.
Rising gold prices could enhance borrowing capacity for customers and support demand for working capital loans, particularly among small businesses and self-employed borrowers.
Gold loan companies primarily lend against existing household jewellery, limiting the direct impact of weaker fresh jewellery demand on the sector.
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