Gold Rally Pushes Muthoot, Manappuram and IIFL Finance Shares Higher as Diwali Nears

Mumbai | October 17

Gold continues to sparkle ahead of Diwali, extending one of its strongest rallies in recent years. Prices of the yellow metal hit a record $4,378 per ounce in global trade this week, nearly doubling since early 2024. On the Multi Commodity Exchange (MCX), domestic gold prices touched ₹1,28,395 per 10 grams, the highest ever recorded.

The surge has not only lifted festive sentiment but also sent gold-linked financial stocks soaring. Shares of Muthoot Finance, Manappuram Finance, and IIFL Finance have risen sharply, gaining between 25% and 57% over the past six months.

Gold Prices and Loan Stocks Move in Tandem

The rise in gold has given fresh momentum to India’s gold finance companies. Muthoot Finance’s share price is up nearly 57%, IIFL Finance has advanced around 50%, and Manappuram Finance has gained 25% in the same period, outperforming most other financial stocks.

In Friday’s trade, Muthoot Finance was quoted around ₹3,330, Manappuram Finance near ₹289, and IIFL Finance at ₹499 on the National Stock Exchange. The rally comes as investors favour gold-backed lending firms, which benefit when the value of collateral increases along with bullion prices.

Why Gold’s Rally Benefits Lenders

Rising gold prices enhance the value of assets pledged for loans. Borrowers can now secure higher loan amounts against the same quantity of gold, improving credit flow during the festive and wedding season. For lenders, this means stronger disbursements, higher yields, and better loan-to-value ratios. It also provides a cushion for existing loans, reducing default risks and improving asset quality — a key advantage in volatile markets.

NBFCs Continue to Deliver Strong Growth

According to Business Standard, Muthoot Finance reported 42% year-on-year growth in assets under management (AUM) in the June quarter, with margins improving and credit costs falling. Its gold loan book rose 40% year-on-year, supported by recoveries of around ₹350 crore. Subsidiary Muthoot Money also recorded a 202% increase in AUM, highlighting strong demand for gold-backed loans even as other retail credit segments slowed.

While gold loan non-banking financial companies (NBFCs) are not directly tied to short-term gold price movements, elevated valuations create a favourable environment for sustainable growth and profitability.

#MuhuratAaGaya: Gold Shines Through Diwali 2025

As India prepares for Muhurat trading and Dhanteras, gold remains both a cultural symbol and a market barometer. Demand for coins and bullion remains resilient even at record levels, with buyers viewing gold not just as ornamentation but as a long-term store of value.

For investors, this festive season underlines a broader trend — gold’s dual role as a safe-haven asset and a wealth creator. And for gold-loan NBFCs like Muthoot, Manappuram, and IIFL, it’s shaping up to be another golden quarter. Because this Diwali, #MuhuratAaGaya — not just for celebration, but for opportunity.