Manappuram Finance and Muthoot Finance shares surged to fresh all-time highs on Wednesday, with gains of up to 7% as domestic and global gold prices touched new records. The rally reinforced investor appetite for gold-backed lenders amid a broader bullion surge across markets.

Stock Performance Highlights

Both gold loan companies delivered strong intraday performance, scaling fresh peaks on the BSE:

Gold Price Surge Drives Market Sentiment

The rally in gold financiers mirrors sharp gains in bullion prices across markets. Gold futures with February expiry on the Multi Commodity Exchange of India (MCX) hit a lifetime high of ₹138,676.00 per 10 grams on Wednesday. Contracts with April and June expiry also scaled fresh all-time highs:

Globally, spot gold climbed to a record $4,439.00 per ounce, buoyed by growing expectations of further US interest rate cuts and heightened safe-haven demand. Frictions in Venezuela, where the US has blockaded oil tankers, have added to the metal's appeal.

Exceptional Year-to-Date Performance

The surge in bullion has translated into outsized gains for gold loan companies:

Brokerage Outlook and Operating Momentum

Motilal Oswal Financial Services highlighted Muthoot Finance as among the strongest gold loan franchises in the country, reflected in its industry-leading growth and best-in-class profitability. The brokerage noted that Muthoot delivered a broad-based earnings beat in the quarter, even after adjusting for one-offs in interest income. Key performance drivers included:

• Strong gold loan growth momentum
• Improved asset quality due to recoveries from the non-performing asset pool
• Expanded net interest margins and spreads driven by higher yields
• Decline in the cost of funds

For Manappuram Finance, analysts at Axis Direct said in a Q2 result update that the company will continue to prioritize accelerated growth in its gold loan portfolio, driven by higher ticket sizes and expectations of strong customer additions. The brokerage noted that while aligning gold loan yields with peers could weigh on net interest margins, this would be offset by a declining cost of funds, helping the company maintain margins at current levels.

Industry Dynamics and Future Outlook

Both companies have benefited from improving demand for gold loans amid industry-wide tightening in unsecured credit. Motilal Oswal said the favorable outlook for gold loan demand positions Muthoot Finance well to sustain its growth momentum. For Manappuram Finance, Axis Direct indicated that the non-gold portfolio is likely to consolidate before resuming growth in a calibrated manner as the company reassesses profitability and asset quality.

As gold prices continue to push deeper into uncharted territory, investors are turning to lenders most closely tied to the metal, driving continued interest in the gold loan sector.

Manappuram Finance Limited has completed the allotment of secured, non-cumulative, redeemable, non-convertible debentures worth Rs 500 crores. The company's Financial Resources and Management Committee approved the allotment on December 15, 2025, following the earlier approval for issuance.

Debenture Allotment Details

The committee has finalized the key terms and conditions for the debenture issuance:

Interest Payment Structure

The debentures carry an annual coupon rate of 8.00% with annual payment frequency. Interest payment dates are scheduled for December 15, 2026, and December 15, 2027. The company has incorporated penalty provisions, whereby in case of default in payment of interest or principal, an additional interest of 2.00% per annum over the coupon rate will be charged for the defaulting period.

Security and Asset Coverage

The debentures are secured by a first ranking pari-passu charge on all current assets, book debts, and receivables (both present and future) of the company. The security is created in favor of the Debenture Trustee, maintaining 100.00% security cover of the outstanding principal amounts and interest at all times until maturity. The company is required to maintain minimum security coverage in accordance with applicable SEBI guidelines.

Fund Utilization Strategy

The net proceeds from the debenture subscription will be exclusively utilized for deployment in business and growth of the asset book. The funds are earmarked for purposes permitted by RBI for bank finance and will not be used for capital market investments, onlending, speculative purposes, or other activities not permitted by regulatory authorities. Pending full utilization, the company may invest proceeds in money market instruments, mutual funds, or deposits with scheduled commercial banks.

Financial Position Overview

Based on the company's consolidated balance sheet, Manappuram Finance demonstrates strong financial fundamentals:

The debenture allotment represents a strategic move to strengthen the company's capital base and support its expansion plans in the NBFC sector.