The transition from traditional bullet repayments to monthly interest-servicing schemes caused significant numbers of borrowers to miss payments, pushing loans into higher delinquency buckets. Consequently, stage-III assets expanded sequentially to ₹7,268 crore, while stage-II assets saw an even steeper rise during the September quarter. Management expects these operational pressures to normalize as customers adjust to the altered payment schedule. Meanwhile, Muthoot raised its full-year growth guidance for gold loans to 25%, despite warnings of yield compression and aggressive peer competition.
Key points
Regulatory adjustments enforced on April 1 prompted a shift to monthly collections that c…: Regulatory adjustments enforced on April 1 prompted a shift to monthly collections that caused temporary payment friction.
Management increased its full-year gold loan growth guidance from 15% to 25% despite near…: Management increased its full-year gold loan growth guidance from 15% to 25% despite near-term headwinds.
Analysts warn that monthly collection models and heightened market competition could comp…: Analysts warn that monthly collection models and heightened market competition could compress future yields and margins.
Sources checked by our analysis pipeline: 1
Muthoot Finance shares slid to a new 52-week low of ₹2,305 on the National Stock Exchange on Monday as investors tried to digest the asset quality deterioration in the September quarter (Q2FY27) with rising loan delinquencies. This was when its mainstay gold loan assets under management (AUM) increased by 43% year-on-year, backed by higher prices, improved tonnage and client additions.
Better yields led to a 152 basis points (bps) sequential rise in net interest margin (NIM) to 11.93%. On the flip side, credit costs increased, with risky stage-III assets soaring sequentially to ₹7,268 crore in Q2 from ₹3,926.5 crore in Q1, and stage-II assets surging to ₹23,466 crore from ₹1,876 crore in Q1 and ₹1,062 crore in Q4FY26.
Following implementation of the Reserve Bank of India’s revised regulations effective 1 April, Muthoot introduced structured monthly interest-servicing gold loan schemes. Earlier, it offered bullet repayment loans, wherein customers could pay interest at any point during the loan tenure without any prepayment penalty.
This transition led to missed payments and consequently, a sharp movement into stage-II and stage-III buckets. As customers get…
The FTSE 100 experienced declines today as falling crude oil prices weighed heavily on the market. The downward movement in oil prices directly dragged down major oil companies, contributing to the broader index's losses.
Appointed liquidators are struggling to offload high-end assets confiscated by the Commercial Affairs Department as buyer turnout remains exceptionally low. Prospective bidders are hunting for steep bargains, but realistic guide prices and a hefty 60 percent additional stamp duty on foreigners continue to stall transactions. This mismatch leaves the majority of prime district listings unsold across consecutive liquidation attempts.
Alstom shares experienced a sharp decline today, falling by 27%. The specific reasons behind the steep drop in the company's stock were not immediately detailed.