Shares of Muthoot Finance are currently trading 5.1% lower at ₹2,175. The stock is down 11% from its 52-week high of ₹2,435. IIFL Finance shares are down 4.7% at ₹317.8. The stock is down 43% from its 52-week high of ₹560.

By Hormaz Fatakia

Shares of gold financing companies, Muthoot Finance Ltd. and IIFL Finance Ltd., fell as much as 10% on Wednesday, April 9, after RBI Governor Sanjay Malhotra announced that the central bank will be releasing comprehensive guidelines on gold loans.

“Loans against the collateral of gold jewellery and ornaments commonly known as gold loans are extended by regulated entities both banks and NBFCs for both consumption and income generation purposes in order to harmonize guidelines across various types of regulated entities to the extent possible, keeping in view their differential risk-bearing capabilities we shall issue comprehensive regulations on provisional norms as well as conduct related aspects for such loans,” the Governor said during his monetary policy speech.

For Muthoot Finance, gold loans comprise of 98% of the company’s overall Assets Under Management (AUM), while for Manappuram and IIFL Finance, the figure stands at 50% and 21% respectively of the overall AUM.

Shares of Muthoot Finance are currently trading 10% lower at ₹2,063.4. The stock is down 15% from its 52-week high of ₹2,435. IIFL Finance shares are down 7.5% at ₹308.45. The stock is down 43% from its 52-week high of ₹560.

Shares of Manappuram Finance are trading 3% lower post this announcement at ₹222.25. The stock is in the Futures & Options (F&O) ban, which means no new positions can be created in this stock.

Also Read: Gold rate jumps today: Check latest prices in India and global trends

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