Poonawalla Fincorp shares gain on launch of gold loan business, check details

Shares of Poonawalla Fincorp rose 2% in early deals on Tuesday  after the firm announced its foray into the gold loan sector on April 15, intending to expand its lending portfolio significantly. The company plans to establish 400 new branches over the next year, targeting Tier 2 and Tier 3 cities to enhance its market reach.

Poonawalla Fincorp shares rose 2 percent to Rs 375 against the previous close of Rs 375 on BSE. Market cap of the firm rose to Rs 29,117 crore. The stock is neither oversold nor overbought on charts, signals its relative strength index (RSI), which stands at 68.6. In terms of price action, the stock is trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

The stock rose 28% in two years. In five years, the stock delivered multibagger returns of 2041%. However, the stock has lost 22% in a year.

The initiative includes onboarding industry professionals to provide "tailored solutions" and improve the customer experience. The company promises "secure and transparent" financing options with approvals granted in "less than 30 minutes" and requiring "minimal documents".

Under the aegis of the Cyrus Poonawalla Group, the firm is positioning itself as a provider of a "secure and transparent" financing solution that caters to diverse needs. The gold loan product is designed to respect both the emotional and financial value of gold, ensuring customer asset safety is paramount. Arvind Kapil, MD & CEO of Poonawalla Fincorp, stated, "Our gold loan offering represents a natural progression in our secured lending portfolio, combining traditional value with modern convenience. At Poonawalla Fincorp, customer asset safety and transparency remain paramount, while delivering reliable and premium services."

The company sees the gold loan market in India as a "substantial opportunity" with "robust growth" projected in the coming years. Poonawalla Fincorp aims to capture this opportunity through a "customer-centric approach" and is committed to delivering premium services tailored to borrowers' needs. The company's shares had closed 3.9% higher last week at Rs 366 on the NSE. The strategic entry into the gold lending segment underscores the firm’s ambition to tap into the promising growth in both urban and rural markets.