India's Gold Loan Boom: L&T joins Tata, Birla and Godrej

Gold Loans Are India's Hottest Lending Business — And Everyone Wants In

Gold loans have quietly become one of the most sought-after businesses in Indian finance. In the space of just a few months, L&T Finance has laid out an aggressive branch expansion plan, while Tata Capital, Godrej Capital and Aditya Birla Capital have all announced their entry into the segment — either by acquiring existing gold loan companies or building the business from scratch. Here's what's driving this rush, and what it means for anyone thinking of pledging their gold for a loan.

L&T Finance's Big Bet: 500 New Branches Every Year

L&T Finance plans to open at least 500 dedicated gold loan branches every year for the next four to five years, eventually growing its network to somewhere between 2,500 and 3,000 branches. Speaking to reporters in Ahmedabad, the company's Whole-time Director and Chief Operating Officer, Raju Dodti, said the business currently runs 343 active gold loan branches and expects to cross 800 branches by the end of this financial year.

The company entered the gold loan business by acquiring a Chandigarh-based company in June 2025, starting out with 130 branches. It has already added more than 200 branches since then, taking it to its current base of 343.

Where Will The New Branches Come Up?

Dodti said the expansion would cover every region of the country, though the company plans to prioritise the east first, followed by the west, south and north — while still opening branches in multiple regions at once rather than fully completing one region before moving to the next. In Gujarat specifically, the company expects to add 50-60 new branches every year, out of a minimum of 100 branches earmarked annually for the western region as a whole.

How Fast Is The Gold Loan Book Growing?

The numbers explain why L&T Finance is moving so aggressively. Its gold loan book stood at around ₹3,800 crore as of June 2026, out of a total loan book of ₹1.29 lakh crore. More strikingly, the gold finance portfolio grew 182% year-on-year — from ₹1,360 crore in the April-June quarter of FY26 to ₹3,829 crore in the same quarter of FY27.

While the company expects its overall loan book to grow 20-25% annually, it's projecting gold finance alone to grow upward of 50-60% a year — more than double the pace of its other businesses.

Why Gold Loans, And Why Now?

Dodti pointed to a simple statistic to explain the opportunity: India's households hold around 28,000 tonnes of gold, but only about 8% of it is currently used to raise loans. The overall Indian gold loan market — including loans given by both organised lenders and the informal, unregulated market (local moneylenders and pawnbrokers) — is estimated at ₹20-21 lakh crore. That leaves enormous room for banks and registered lenders to win customers away from informal lenders, who typically charge higher, less transparent rates.

He also linked the opportunity to a broader trend: India's overall credit growth is running at close to 19%, nearly two and a half times the pace of real economic growth (around 7.8% in the most recent quarter) — meaning lending, as a business, is expanding faster than the economy itself.

On why gold loans carry higher interest rates than something like a home loan, Dodti explained that gold lending requires specialised, high-security infrastructure to store the pledged jewellery safely — branches need vaults and security systems that push up both the upfront cost of setting up a branch and the ongoing cost of running it, which then gets reflected in the interest rate charged to customers.

As part of its push to reach new customers, L&T Finance has also launched a new gold loan campaign featuring cricketer Jasprit Bumrah, rolling out across 150 branches in eight states and one union territory. According to a company survey conducted in Ahmedabad, 53% of people said they'd consider taking a gold loan — most commonly for home improvement, starting a new business, or buying a two-wheeler.

It's Not Just L&T Finance — India's Biggest Business Houses Are Piling In

L&T Finance's expansion plan is just one piece of a much bigger story. Over the past two months alone, three of India's largest business conglomerates have announced their entry into gold loans — a sign of just how attractive this business has suddenly become.

Tata Capital Buys Its Way In With Yogloans

In July 2026, Tata Capital — the Tata Group's financial services arm — announced it would acquire an 88.6% stake in Kerala-based Yogakshemam Loans (Yogloans) for a valuation of up to ₹318 crore. Yogloans runs 162 branches across Kerala, Karnataka, Tamil Nadu and Andhra Pradesh, manages a loan book of about ₹708 crore, and serves roughly 32,000 gold loan customers. Its portfolio had grown at a compound annual rate of 25% over the previous five years — numbers that clearly caught Tata Capital's eye. Brokerage house IIFL Capital noted that Yogloans' loan book generates a return on assets of around 5%, more than double what Tata Capital typically earns across its overall lending business — a big part of why gold loans are suddenly so attractive to large, diversified lenders.

Godrej Capital's First-Ever Acquisition Is A Gold Loan Business

Barely a week later, Godrej Capital — part of the Godrej Group — announced its own entry into gold loans, acquiring the gold loan business of Andhra Pradesh-based Kanakadurga Finance for around ₹117 crore. This was Godrej Capital's very first acquisition since it was set up, adding a portfolio of about ₹280 crore, 12,000 customers, 54 branches and roughly 250 employees. The company has said it wants to build a ₹1 lakh crore loan book and serve over a million customers by 2031, and gold loans are now a formal part of that plan.

Aditya Birla Capital Joins The Race With A 1,000-Branch Target

Then, in August 2026, Aditya Birla Capital's non-banking finance arm announced it too was entering gold loans — with perhaps the most ambitious target of the lot. The company plans to open 200-300 dedicated branches by March 2027, scaling up to around 1,000 branches within three years. Unlike Tata Capital and Godrej Capital, Aditya Birla Capital is building this business largely from the ground up rather than through an acquisition, backed by ₹4,000 crore in fresh equity capital it raised earlier this year.

Why Is Everyone Rushing Into Gold Loans At Once?

The scale of this shift shows up clearly in industry-wide numbers: outstanding gold loans across India stood at ₹3.29 lakh crore at the end of May 2026 — a jump of nearly 70% from ₹1.94 lakh crore just a year earlier. A few forces are driving this rush at the same time: gold prices have surged over the past two years, meaning customers can now borrow more money against the same amount of jewellery — a win for both borrowers and lenders. At the same time, gold loans are considered relatively low-risk for lenders, since the loan is backed by physical collateral that can be sold if a customer defaults. And with India's overall credit market still under-penetrated compared to its size, large financial companies are treating gold loans as one of the fastest, safest ways to grow their lending books.

What This Means Going Forward

For consumers, more competition among large, well-capitalised lenders is likely to mean better service, more branches closer to home, and potentially more competitive rates over time, as companies fight to win market share from both traditional gold loan specialists (like Muthoot Finance and Manappuram Finance) and the informal lending market. For the lenders themselves, the real test will be execution — opening hundreds of new branches every year, safely storing large volumes of physical gold, and maintaining strict risk controls, all while scaling at a pace few other lending businesses in India have managed before.