Manappuram Finance

The next 12 months look promising for Manappuram and the gold market, with Goldman Sachs forecasting a rise in gold prices to $2,900 USD. Higher gold prices are expected to benefit gold finance companies. A recent RBI directive aimed at regularizing the gold loan sector will impact unregulated gold lenders. However, companies like Manappuram and Muthoot Finance have long been regulated and comply with most RBI guidelines. In cases where discrepancies arise, they have swiftly adapted, such as by implementing non-cash disbursements as required. Smaller players tend to take longer to adjust to these regulatory changes, making it harder for them to compete. Larger, well-established companies will thrive, while smaller ones may struggle due to the operational efficiency and high costs associated with running a gold loan business. Gradually, Manappuram and Muthoot are likely to gain more market share. In the past, companies engaging in questionable practices, like IIFL, grew rapidly. However, with tighter regulations, growth across the sector is expected to level out. Given the current conditions, Manappuram could see growth of 15-20% in medium term