Alpha Ideas 20-20: Priyan Kondoth Is Bullish On Muthoot Finance. Here’s Why
Gold bangles sit inside a display case. (Photographer: Billy H.C. Kwok/Bloomberg)

Alpha Ideas 20-20: Priyan Kondoth Is Bullish On Muthoot Finance. Here’s Why

Muthoot Finance Ltd., India’s largest gold loans company by loan portfolio, has also been the most trusted financial services brand for four straight years, according to Priyan Kondoth, partner at PP Equity Management Services LLP.

Demand for gold loans rose in the past three quarters of 2018-19 amid the NBFC crisis, Kondoth said, adding that gold loan sanctions jumped more than twofold in the fourth quarter. “The industry is going into increased formalisation. Lower competition and ability to pass cost of borrowings are a few positive factors for the industry,” he said on the sidelines of Alpha Ideas 20-20 event in Mumbai.

Muthoot Finance, according to Kondoth, stands to gain from this as it’s the “lowest cost lender among peers, backed by good financials and continued focus on gold loans”.

The company expects its gold loans portfolio to grow 15-20 percent in 2019-20, he said, adding it’s spending 4.5 percent of its assets under management toward advertising and promotions. The company also partnered leading sports brands like Chennai Super Kings, Indian Super League and the Pro Kabaddi League, among others, and plans to increase its non-gold engagement by 2-3 times, Kondoth said.

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