IndiaGold Achieves Profitability in Gold-Backed Lending

IndiaGold has marked a significant milestone by becoming profitable at the profit-after-tax (PAT) level in the current financial year. Furthermore, the company has secured a non-banking financial company (NBFC) licence, as revealed by two informed sources. This progress is occurring alongside a surge in demand for gold-backed credit throughout India, as borrowers and lenders increasingly opt for secured lending solutions.

Gold Loan Growth Statistics

Industry insights from CRIF High Mark indicate that retail loans witnessed an 18% year-on-year growth in Q2 FY26, with gold loans expanding at a remarkable 35.8% YoY. Within this quarter, gold-loan originations surged by 53% year-on-year, reaching Rs 6.05 lakh crore. The statistics also suggest a noteworthy shift towards larger gold loans, with loans exceeding Rs 5 lakh making up over 30% of total gold-loan originations by value. In comparison, the segment for Rs 2.5–5 lakh has steadily increased its market share over the last two years, while the contribution from loans below Rs 1 lakh has seen a decline, indicating a broader usage beyond small, urgent borrowings.

Changing Uses of Gold Loans

While smaller-ticket loans still dominate transaction volumes, gold loans are becoming increasingly popular for business-related needs, particularly among self-employed individuals and micro-entrepreneurs. This category remains a vital entry point for first-time borrowers, with new-to-credit customers representing approximately 15% of origination value in Q2 FY26.

Geographic Expansion in Gold Loan Adoption

The adoption of gold loans is becoming more evenly distributed across India. Nearly two-thirds of originations now originate from cities outside the top nine metropolitan areas, highlighting the expanding reach of this lending category throughout the country.

Future Growth and Strategy

According to sources, obtaining the NBFC licence and entering its first profitable year will facilitate the next phase of growth for IndiaGold’s regulated lending operations. Although the company opted not to comment on the situation, a spokesperson mentioned that the primary focus would be on enhancing risk management, operations, and customer experience as the Gurugram-based firm expands its gold-backed credit offerings.

Funding and Competitive Landscape

On the funding side, IndiaGold has successfully raised $24 million to date, with the latest round of funding occurring in November 2022. The company faces competition from digital-first platforms such as Rupeek along with traditional lenders like Muthoot Finance and Manappuram Finance.