L&T Finance Makes Bold Entry Into Gold Loan Market with ₹1,350 Cr Deal For Paul Merchants Business

Mumbai, June 9, 2025: In a strategic move to enhance its secured lending portfolio, L&T Finance Ltd (NSE: LTF, BSE: 533519) has officially acquired the gold loan business of Paul Merchants Finance Private Limited (PMFL). The transaction, valued at ₹1,350 crore, was carried out via a slump sale on a going concern basis, significantly boosting LTF’s presence in the gold loan segment.

Deal Snapshot

LTF Strengthens Secured Lending Strategy

This acquisition aligns with LTF’s strategic blueprint, supporting its five-pillar growth plan. It gives the non-banking financial company an immediate foothold in the gold loan sector—one of the fastest-growing secured loan categories in India.

According to Sudipta Roy, Managing Director & CEO of L&T Finance Ltd, the move is a “natural, contiguous cross-sell extension” of LTF’s business model.

“With a strong rural base of 1.6 crore customers and a robust 20,000-member field force, this acquisition will act as a force multiplier for customer acquisition and product penetration,” said Roy.

He further noted that entering the gold loan space addresses a critical product gap, giving LTF access to a secured, high-yield lending avenue that fits well with both its urban and rural operations.

Paul Merchants Confident in Smooth Transition

Sat Paul Bansal, Chairman and Managing Director of PMFL, expressed confidence in LTF’s capability to take the business forward while preserving its legacy.

“We’re proud of building a gold loan platform that’s customer-first, compliant, and resilient. With LTF, we believe our customers and staff are in safe hands,” said Bansal.

Market Snapshot – Gold Loan Sector

Gold loans are India’s fastest-growing lending segment, rising 68% YoY in the first nine months of FY25 versus 12.7% a year ago. However, RBI’s tighter appraisal and valuation norms add regulatory pressure. Gold jewellery loans jumped from ₹1.01 lakh crore to ₹1.79 lakh crore between early 2024 and January 2025.

Strategic Impact on L&T Finance

• The acquisition accelerates L&T’s gold loan business by about three years, providing immediate access to an established network and operations.
• Adding gold loans broadens L&T’s portfolio, lowering reliance on unsecured loans and improving risk-adjusted returns.
• Gold loans offer higher margins and lower credit risk, likely boosting L&T’s RoA and NIM within the next few quarters.
• The increased LTV limit and supportive policies create strong demand, benefiting L&T while ensuring compliance.
• Acquiring a compliant NBFC with solid controls helps L&T meet RBI’s strict appraisal and transparency standards effectively.

Regulatory Compliance and Disclosure

L&T Finance has disclosed the transaction as per Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company confirmed that all necessary consents and conditions precedent under the Business Transfer Agreement (BTA) have been fulfilled.

About L&T Finance Ltd

Headquartered in Mumbai, L&T Finance Ltd (formerly L&T Finance Holdings Ltd) is among the top-rated NBFCs in India, holding a ‘AAA’ rating from four different rating agencies.

Under its “Lakshya 2026” vision, the company is transforming into a digitally-driven, retail-focused financial services powerhouse, grounded in ESG principles and a customer-first approach. LTF currently serves 2.6 crore customers and is aggressively scaling its secured lending portfolio to tap into high-growth financial segments.

REF:https://www.bseindia.com/xml-data/corpfiling/AttachLive/8665c829-aa97-4117-8d37-2f42aed24768.pdf

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