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According to the MOSt Market Outlook Report (24th Feb 2025) by Motilal Oswal Financial Services, Bain Capital is finalizing a deal to acquire a controlling stake in Manappuram Finance, a leading NBFC in the gold loan sector. This move signals growing investor confidence in India’s gold loan market.

Gold Loan Market Growth

High Gold Prices: Increased loan-to-value (LTV) ratios.

Rising Credit Demand: Businesses and individuals seeking alternative financing.

Regulatory Support: RBI easing norms for gold loan NBFCs.

Why Bain Capital is Investing in Manappuram Finance

Strong Market Position: Extensive branch network and digital expansion.

Financial Stability: Consistent earnings and asset quality.

Regulatory Boost: RBI lifting restrictions on its subsidiary, Asirvad Micro Finance.

Implications for the NBFC Sector

More Foreign Investments: Potential influx of global capital into gold loan NBFCs.

Competitive Shift: Strengthened position against Muthoot Finance.

Tech Integration: AI-driven risk assessment and digital loan disbursement.

Investor Outlook

Short-Term: Stock price surge with increased institutional interest.

Long-Term: Gold prices and digital lending to drive growth.

Regulatory Watch: RBI policies on LTV ratios and capital adequacy.

Bain Capital’s bet on Manappuram Finance underscores India’s gold loan sector as a strong investment avenue amid regulatory support and digital advancements.

Source: Motilal Oswal Financial Services, MOSt Market Outlook Report (24th Feb 2025).

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