Muthoot Finance Limited says gold loans may reach Rs 16 lakh crore

Muthoot Finance Limited says India’s organised gold-loan market, covering banks and non-banking financial companies, may reach Rs 16 lakh crore in FY 2026, versus Rs 12 lakh crore in FY 2025. It also reports 34,600 tonnes of household gold, of which 2,950-3,350 tonnes is currently used as collateral.

How large could India’s organised gold-loan market become?

India’s organised gold-loan market is projected to reach Rs 16 lakh crore in FY 2026, according to Muthoot Finance. The estimate combines bank and non-banking financial company (NBFC) lending and represents stated year-on-year growth of 33% to 36% from the Rs 12 lakh crore market size cited for FY 2025.

Muthoot Finance attributes the market figures to the CRISIL Industry Report on Gold Loans, January 2026 update. The Rs 16 lakh crore number is a market projection rather than reported lending for a completed period, and it applies to the combined organised market rather than to Muthoot Finance’s loan assets.

The comparison implies an increase of Rs 4 lakh crore between the FY 2025 market size and the FY 2026 projection. Muthoot Finance presents this expansion alongside its estimate of 34,600 tonnes of household gold, using the difference between household holdings and pledged collateral to describe the market’s remaining scope.

How much household gold remains outside collateral use?

India has 34,600 tonnes of household gold, while 2,950-3,350 tonnes is currently used as collateral, Muthoot Finance says. The disclosed range means that household holdings exceed gold currently used as collateral by 31,250-31,650 tonnes, based on the presentation’s estimates.

The 400-tonne range between the lower and upper collateral estimates reflects the source’s disclosed range rather than a single point estimate. Muthoot Finance cites the India Brand Equity Foundation for the 34,600-tonne household-gold figure and cites the CRISIL industry report for the collateral estimate.

Muthoot Finance does not state what portion of the remaining 31,250-31,650 tonnes can be pledged or when it could enter the credit market. It also does not put a rupee value on the 34,600 tonnes, so the presentation supports a physical-gold comparison rather than an estimate of incremental lending supported by unpledged gold.

What shifts does Muthoot Finance identify in gold lending?

Muthoot Finance identifies a borrower shift from informal moneylenders to formal, organised lenders as a factor expanding the market. It says organised lenders offer safer custody, transparent valuation and fairer rates, but it does not disclose a numerical split between formal and informal gold lending.

The company also describes a move from emergency borrowing towards working-capital use. It says micro-enterprises are using gold loans for inventory, expansion and routine working-capital needs, rather than pledging gold solely in distress; no proportion of accounts by end-use is disclosed.

Muthoot Finance further says the market is moving from a South-led model towards wider national demand. The South remains the leading region, according to the presentation, while growing awareness and changing perceptions are associated with branch expansion and demand in the North, East and West; regional loan balances and branch counts are not provided.

How does Muthoot Finance compare with the wider opportunity?

Muthoot Finance reports a 47% gold-loan market share among NBFCs, citing the CRISIL report’s January 2026 update. That measure differs from the Rs 16 lakh crore organised-market estimate, which includes both banks and NBFCs rather than NBFC lenders alone.

At Q2 FY 2027, the group reported 219.6 tonnes of gold underlying its gold-loan assets, 12,617,889 loan accounts and 7,540,214 customers. These were higher than 210.1 tonnes, 11,896,885 accounts and 7,169,995 customers in Q1 FY 2027, an increase of 9.5 tonnes, 721,004 accounts and 370,219 customers.

The group’s gold-loan assets were Rs 1.932123 lakh crore at Q2 FY 2027, measured as the principal amount of gold-loan assets. Muthoot Finance accounted for Rs 1.789562 lakh crore and 204.1 tonnes, compared with Muthoot Money’s Rs 12,670.4 crore and 13.7 tonnes, making Muthoot Finance the largest disclosed group component.

How is the operating model intended to support expansion?

Muthoot Finance describes a move from physical interaction towards a phygital model, with branches remaining the foundation and digital mobile layers supporting onboarding, repayment and customer service. The presentation does not disclose digital-originated loan volumes, mobile-user numbers or digital repayment volumes.

The group branch network stood at 7,904 in H1 FY 2027, compared with 7,524 in H1 FY 2026, an increase of 380 branches or 5%. This count includes subsidiary branches and provides the physical network context for the company’s stated effort to address demand beyond the South.

Consolidated assets under management, defined as principal amount of loan assets, reached Rs 2.093173 lakh crore in H1 FY 2027, up 42% from Rs 1.476734 lakh crore in H1 FY 2026. Muthoot Finance contributed 88% of consolidated assets under management in H1 FY 2027, compared with 87% a year earlier, while subsidiaries’ contribution declined to 12% from 13%.

Conclusion

Muthoot Finance presents an organised market projected to rise from Rs 12 lakh crore in FY 2025 to Rs 16 lakh crore in FY 2026, with household gold holdings of 34,600 tonnes substantially exceeding the 2,950-3,350 tonnes currently used as collateral. Its market case rests on formalisation, business-related borrowing, wider regional demand and branch-led digital servicing.

The next measures to watch are collateral volumes, regional loan data and digital-service use, none of which are quantified as future targets in the presentation. Muthoot Finance has reported 7,904 group branches in H1 FY 2027 and 219.6 tonnes of group gold collateral in Q2 FY 2027, but it has not disclosed a branch-opening target, regional rollout target or digital-adoption target.