Robust growth in gold loans seems to be whetting the appetite of large non-banking financial companies (NBFCs) to go in for either the acquisition of smaller NBFCs specialising in this line of business or buyout gold loan business from smaller but diversified NBFCs.This is underscored by Tata Capital Ltd’s (TCL) Monday announcement that it will acquire about 88.6 per cent stake in Thrissur-based Yogakshemam Loans Ltd (Yogloans) at pre-money equity valuation of Yogloans not exceeding ₹318 crore. This will also include primary infusion of about ₹93 crore for growth.In June 2025, L&T Finance Ltd (LTF) announced completion of the transfer of the gold loan business of Paul Merchants Finance Private Ltd (PMFL), a wholly owned subsidiary of Paul Merchants Ltd, to LTF for a total consideration of ₹711 crore by way of slump sale on a going concern basis.Sanjay Agarwal, Senior Director, CareEdge Rating, said: “Larger NBFCs are looking for newer avenues of growth. All top NBFCs have announced plans to get into the gold loan business in the last two to three years. Gold loan is seen as a very secure asset class by lenders. While the product operates at a higher opex, the yields are good enough to compensate this. So the profitability is good.”NBFCs are notching up strong growth in gold loans (loans against gold jewellery). As of May-end 2026, their gold loan portfolio surged 69.9 per cent year-on-year (y-o-y) against 38.9 per cent y-o-y as of May-end 2025. Gold loans have gathered steam on the back of jump in gold prices and NBFCs own push towards secured borrowing.Public goodAgarwal observed that gold loan lenders are also doing a public good by serving those who otherwise don’t have access to funding or would have tapped money lenders.“It’s a high growth product. It’s a product with a large industry size and growing. In India, the potential for growth is probably multiple times of what it is right now,” he said.HDFC Securities, in a report, said gold loans (GL) have a massive addressable market in terms of collateral value of household gold holdings (currently at 10 per cent penetration).“GL has been one of the key profit pools for NBFCs. Banks’ GL portfolio largely comprises ETB (existing to bank) customers skewed towards higher ticket sizes and moderate yields (9-11 per cent).“NBFCs portfolio is skewed towards customers with lower ticket sizes (average customer exposure of ₹1-1.5 lakh) and significant pricing power (yields higher by 700-800 basis points vs banks),” said HDFC Securities Research Analysts Krishnan ASV, Deepak Shinde, Ayush Pandit and Samarth Desai.However, high operational intensity and increasing competitive intensity are likely to drive longer break-even periods for new players. “We expect the profitability for incumbents to moderate marginally in the near-term, with steady healthy profitability across cycles with gradual easing of competitive intensity,” said the analysts.Published on July 13, 2026