Tata Capital joins the gold loan rush. What’s driving the frenzy?
India’s gold loan industry has tripled in size in three years, with assets under management rising from ₹6.3 lakh crore in March 2023 to ₹19.4 lakh crore in March 2026. Tata Capital’s proposed acquisition of Kerala-based Yogloans is the latest sign of rising investor interest in the fast-growing segment.
- Jul 13, 2026,
- Updated Jul 13, 2026 7:34 PM IST
Tata Capital on Monday announced its foray into the gold loan market with the proposed acquisition of Yogakshemam Loans Limited, or Yogloans, adding to the growing interest among lenders and investors in this rapidly expanding segment. Thrissur-based Yogloans is an RBI-registered non-bank finance company focused primarily on gold loans.
Tata Capital is a diversified NBFC and part of the Tata Group, offering a suite of more than 25 lending products, from consumer loans to business loans. As of March 31, 2026, it had net assets under management of ₹2.8 lakh crore.
The transaction is based on a pre-money equity valuation of Yogloans not exceeding ₹318 crore, subject to customary adjustments. It also includes a primary capital infusion of about ₹93 crore to support the company’s growth plans. Once the transaction is completed, Tata Capital will hold around 88.6% of Yogloans’ share capital.
How big is Yogloans?
Yogloans currently has a network of 162 branches across Kerala, Karnataka, Tamil Nadu and Andhra Pradesh. Its AUM stood at ₹708 crore as of March 31, 2026. The company serves around 32,000 gold loan customers and has built strong capabilities in sourcing, underwriting and servicing over more than a decade in the business.
Why is Tata Capital entering the gold loan business?
For Tata Capital, the entry into gold loans adds a secured lending product with significant growth potential to its retail lending portfolio and supports its strategy of building a diversified lending franchise, according to Rajiv Sabharwal, MD and CEO of Tata Capital.
How fast is the market growing?
The move comes against the backdrop of strong growth in the gold loan market in recent years. In 2024 and 2025, gold prices surged amid global geopolitical uncertainty and rising investment demand. This has benefited borrowers, as they can either borrow more against the same amount of pledged gold or pledge less gold for the funds they need.
According to Experian, gold loan sourcing grew at an exponential rate of 84% year-on-year in FY2026 and 69% in FY2025, outpacing all other retail credit products.
The industry’s AUM has grown from around ₹6.3 lakh crore in March 2023 to ₹19.4 lakh crore in March 2026.
“Gold loan is no longer a secondary product — it is emerging as a key driver of retail credit growth. Customers are increasingly choosing gold loans, leading to a visible shift in the overall lending mix,” Experian noted.
Average ticket size has also seen a sharp increase, rising from ₹0.98 lakh in FY2023 to ₹1.96 lakh in FY2026. This indicates that borrower capacity is growing, along with demand for larger loan amounts.
Over the last few years, unsecured personal loans saw strong growth, but concerns also rose over potential delinquencies. Gold loans help minimise such worries because physical gold is pledged as collateral.
A report by TransUnion CIBIL in April 2026 noted that gold loan balances now account for 11.1% of India’s retail credit portfolio, up from 5.9% in March 2022.
Why are investors interested?
Public sector banks hold close to 58% of the gold loan market. However, NBFCs, including standalone players such as Muthoot Finance, Manappuram Finance and IIFL, have been steadily gaining traction. As of March 2026, their share had touched 20%, growing 5% year-on-year in both FY2025 and FY2026, according to Experian.
This shift is drawing more investor interest into the segment. In 2025, global private investment firm Bain Capital entered into definitive agreements to acquire joint control in Manappuram Finance, India’s second-largest gold financier.
Mumbai-based diversified NBFC L&T Finance also acquired the gold loan business of Paul Merchants Finance, including the transfer of PMFL’s ₹1,350 crore gold loan book.
Since then, L&T Finance has rapidly scaled up the business. Its gold finance book more than doubled to ₹3,829 crore in the first quarter of FY27 from ₹1,360 crore in the year-ago quarter, while the number of active branches rose from 130 to 343 during the same period.
According to analysts at HDFC Securities, the addressable market based on gold holdings remains huge, with just 10% penetration. Unit economics for NBFCs are also lucrative, with high yields and minimal credit risk, they point out.
However, they also note that the business is branch-led and comes with operational challenges such as fraud, theft, auctions and high operating leverage. Rising competition is also likely to put pressure on yields, they said.
Tata Capital on Monday announced its foray into the gold loan market with the proposed acquisition of Yogakshemam Loans Limited, or Yogloans, adding to the growing interest among lenders and investors in this rapidly expanding segment. Thrissur-based Yogloans is an RBI-registered non-bank finance company focused primarily on gold loans.
Tata Capital is a diversified NBFC and part of the Tata Group, offering a suite of more than 25 lending products, from consumer loans to business loans. As of March 31, 2026, it had net assets under management of ₹2.8 lakh crore.
The transaction is based on a pre-money equity valuation of Yogloans not exceeding ₹318 crore, subject to customary adjustments. It also includes a primary capital infusion of about ₹93 crore to support the company’s growth plans. Once the transaction is completed, Tata Capital will hold around 88.6% of Yogloans’ share capital.
How big is Yogloans?
Yogloans currently has a network of 162 branches across Kerala, Karnataka, Tamil Nadu and Andhra Pradesh. Its AUM stood at ₹708 crore as of March 31, 2026. The company serves around 32,000 gold loan customers and has built strong capabilities in sourcing, underwriting and servicing over more than a decade in the business.
Why is Tata Capital entering the gold loan business?
For Tata Capital, the entry into gold loans adds a secured lending product with significant growth potential to its retail lending portfolio and supports its strategy of building a diversified lending franchise, according to Rajiv Sabharwal, MD and CEO of Tata Capital.
How fast is the market growing?
The move comes against the backdrop of strong growth in the gold loan market in recent years. In 2024 and 2025, gold prices surged amid global geopolitical uncertainty and rising investment demand. This has benefited borrowers, as they can either borrow more against the same amount of pledged gold or pledge less gold for the funds they need.
According to Experian, gold loan sourcing grew at an exponential rate of 84% year-on-year in FY2026 and 69% in FY2025, outpacing all other retail credit products.
The industry’s AUM has grown from around ₹6.3 lakh crore in March 2023 to ₹19.4 lakh crore in March 2026.
“Gold loan is no longer a secondary product — it is emerging as a key driver of retail credit growth. Customers are increasingly choosing gold loans, leading to a visible shift in the overall lending mix,” Experian noted.
Average ticket size has also seen a sharp increase, rising from ₹0.98 lakh in FY2023 to ₹1.96 lakh in FY2026. This indicates that borrower capacity is growing, along with demand for larger loan amounts.
Over the last few years, unsecured personal loans saw strong growth, but concerns also rose over potential delinquencies. Gold loans help minimise such worries because physical gold is pledged as collateral.
A report by TransUnion CIBIL in April 2026 noted that gold loan balances now account for 11.1% of India’s retail credit portfolio, up from 5.9% in March 2022.
Why are investors interested?
Public sector banks hold close to 58% of the gold loan market. However, NBFCs, including standalone players such as Muthoot Finance, Manappuram Finance and IIFL, have been steadily gaining traction. As of March 2026, their share had touched 20%, growing 5% year-on-year in both FY2025 and FY2026, according to Experian.
This shift is drawing more investor interest into the segment. In 2025, global private investment firm Bain Capital entered into definitive agreements to acquire joint control in Manappuram Finance, India’s second-largest gold financier.
Mumbai-based diversified NBFC L&T Finance also acquired the gold loan business of Paul Merchants Finance, including the transfer of PMFL’s ₹1,350 crore gold loan book.
Since then, L&T Finance has rapidly scaled up the business. Its gold finance book more than doubled to ₹3,829 crore in the first quarter of FY27 from ₹1,360 crore in the year-ago quarter, while the number of active branches rose from 130 to 343 during the same period.
According to analysts at HDFC Securities, the addressable market based on gold holdings remains huge, with just 10% penetration. Unit economics for NBFCs are also lucrative, with high yields and minimal credit risk, they point out.
However, they also note that the business is branch-led and comes with operational challenges such as fraud, theft, auctions and high operating leverage. Rising competition is also likely to put pressure on yields, they said.