Shriram Finance is keeping its three-year gold-loan growth target as delinquencies rise, while management says some borrowers are not yet keeping up with monthly payment schedules.
At the Oct. 23 earnings call, an analyst described an earlier goal of doubling gold lending’s share of the overall book, from about 2.5% to 5% over three years. Executive Vice Chairman Umesh Govind Revankar said the plan had not changed. The analyst used “overall book” to describe the target; Revankar did not restate its denominator.
Reuters reported that gross Stage 3 loans accounted for 3.12% of Shriram Finance’s gold-loan portfolio in the September quarter, up from 2.57% in the June quarter and 2.28% a year earlier. Stage 3 loans are more than 90 days overdue.
Revankar said some customers accustomed to bullet repayment were not keeping up with monthly equated monthly installments (EMIs) or interest payments. He said those repayment options can give borrowers access to larger loans. Shriram Finance is increasing customer communication to encourage regular payments, but management gave no timeline for when repayment behavior might normalize.
Revankar said he saw a large opportunity in gold lending if the company identified borrowers carefully and valued their gold accurately. He said the lender could sell pledged gold to recover unpaid dues and asserted that it had no credit cost on gold loans.
The gold-loan book was about ₹9,000 crore, Revankar said. Chief Financial Officer Sunder Subramanian said disbursements totaled ₹5,443 crore in the September quarter, compared with ₹5,153 crore in the previous quarter. The loan-to-value ratio, including accrued interest, was about 72% to 73%, with no significant change from the prior quarter, he said.
Separately, Revankar said Shriram Finance lowered its FY27 asset-under-management growth outlook to 15% to 17%, from initial guidance of 18%, citing the West Asia conflict and weak monsoon conditions.
