Gold Stock: Muthoot Finance Falls 6% After RBI's New Rules On Gold Loans; Should You Buy-On-Dip?

Muthoot Finance Shares Today: Despite a positive opening of the Indian stock market, Muthoot Finance shares declined more than 6% on Friday. The NBFC sector stock has been decline since the Reserve Bank of India announced tightening of gold loans norms on Wednesday.

Muthoot Finance shares also experienced significant high trading volumes during the early trading session on Friday.

Muthoot Finance Share Price Movement

The NBFC stock, which has a dominance in gold loans, was trading 5.64% lower at Rs 2019.55 per share on BSE on Friday at 10 am. The company scrip opened lower at Rs 2099 apiece on NSE today. Its market capitalisation stood at Rs 81,077.64 crore.

Muthoot Finance scrip witnessed a sudden spike in trading volumes today. According to BSE data, its shares witnessed a spike in trading volumes by more than 2.5 times today. Muthoot Finance shares were exchanged by more than 4000 times on BSE at 9 am.

The company scrip hit its 52-week-low mark of Rs 1,510.00 apiece on BSE on 9 May, 2024. Despite touching a 52-week high mark of Rs 2,444.65 apiece on BSE on 20 March 2025, Muthoot Finance's stock value has declined nearly 7.74% in a month and nearly 9% year to date (YTD). However, the investors holding the gold stock for more than a year have gained as the stock value has increased 22% in one year.

RBI Announces Changes in Gold Loan Norms

RBI Governor Sanjay Malhotra on Wednesday gave an important update related to the gold loan norm while announcing RBI's Monetary Policy Committee's decision on repo rates. Sanjay Malhotra said that the RBI is planning to bring uniform gold loan norms soon.

RBI Governor Sanjay Malhotra in his speech on April 9 underscored the need for a comprehensive guideline for gold loans for easier and simpler borrowing. "Loan against the collateral of gold jewellery and ornaments, commonly known as gold loans, are extended by regulated entities both banks and NBFCs for both consumption and income generated purposes," said Sanjay Malhotra highlighting the role of NBFCs in gold loans in India. The announcement sparked a decline in top NBFC stocks including Muthoot Finance, IIFL etc.

Muthoot Finance Stock Recommendations

Kotak Institutional Equities, in its daily market commentary for Friday, maintained 'Buy' rating for Muthoot Finance.

Motilal Oswal on Friday maintained that RBI's draft gold lending guidelines are unlikely to have a major impact on NBFCs and said that its recommendations remain unchanged for associated companies.

"The draft gold-lending guidelines are not disruptive and are only intended to harmonize the regulations for all the REs that offer gold loans. While there are a few operational changes that both banks and NBFCs will be required to implement, we do not see these guidelines as having any long- or medium-term impact on the loan growth or profitability of gold loan companies under our coverage (viz., Muthoot, Manappuram, and IIFL Finance). Our estimates and recommendations are unchanged," noted Motilal Oswal in a report on Friday.

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