Manappuram Finance has emerged as Jefferies’ preferred play on the growing monetisation of household gold through formal lending channels, as the sustained rally in gold prices in the last one year (up 35 per cent to $4,600 an ounce) has boosted household wealth and created room for further gold-backed borrowing, according to their analysis.
Other potential beneficiaries of higher gold prices, the brokerage said in a recent note coauthored by Mahesh Nandurkar, Jefferies’ managing director, Abhinav Sinha and Priyank Shah, include Titan and Kalyan Jewellers, Multi Commodity Exchange of India (MCX), and gold lenders such as IIFL Finance and Muthoot.
“The value of these holdings stood at around $3.9 trillion as of March 2026, up nearly $1.9 trillion over the past two years. This compares with around $111 billion worth of gold held by the Reserve Bank of India,” Jefferies said.
A 10 per cent increase in gold prices, according to their calculations, could generate around $400 billion in additional household wealth and support another $20-25 billion in gold loans. “Together, these could provide another 80-100 basis points of tailwind to GDP and spending,” Jefferies said.
Gold loans
Gold loans, as per the note, were estimated at around $197 billion as of March 2026, having grown nearly 73 per cent in dollar terms over the past two years. They now account for around 7 per cent of total bank and non-bank financial company (NBFC) credit.
“The monetisation of household gold through bank and NBFC loans has increased from less than 4 per cent before 2020 to around 5.1 per cent in March 2026. Even so, only around 15 per cent of household gold holdings are estimated to be monetised, assuming a loan-to-value (LTV) ratio of 65 per cent and factoring in additional lending through unorganised channels,” Nandurkar, Sinha and Shah wrote.
A reversal in this trend over the next two years, Jefferies estimates, could result in an 8-10 percentage point increase in the share of gold holdings being monetised, translating into an additional $15-20 billion in gold loans annually.
Model portfolio
Against this backdrop, Jefferies has added Manappuram as the preferred stock to play the gold monetization theme, funded by modest trims across select lenders. It has also replaced Jindal Stainless with Hindustan Zinc to gain exposure to the silver theme in its India model portfolio.
“Among other additions, Meesho has been included as a play on mass discretionary consumption, while Navin Fluorine has been added on growth opportunities across CDMO, cooling products, specialty chemicals and advanced materials. These are expected to drive a 23 per cent EPS CAGR during FY26-29E. Ambuja has been removed,” Jefferies said.
