Manappuram Finance, IIFL Finance Stocks Jump After Gold Price Surge

Key Insights 

1. The Gold Loan Company and NBFC shares on May 13, 2026, following an increase in import duty by the Government of India on gold and silver from 6% to 15%.

2. Muthoot Finance's share prices by 4% intraday, whereas Manappuram Finance and IIFL Finance's share prices climbed by 3.9% and 7.1%, respectively. 

The Government of India increased the gold import duty to 15%. Winners and Losers.

The Government of India increased the import duty on gold and silver from 6% to 15% in a notification that was released on May 13, 2026.

This step was taken because of the India's foreign exchange reserves in light of growing economic issues related to the Middle East tensions and high crude oil prices.

India see the immediate effect of this move in the domestic prices of gold at the MCX, leading to a spike in gold loan stocks.

A sudden spurt in domestic gold prices will be highly positive for gold financing companies.

Gold loan NBFCs base their disbursements on the collateral value of gold jewellery deposited with them by customers.

Thus, a rise in gold prices translates to higher collateral value for the lenders.

This means more disbursements for each gram of gold without incurring higher risks from the shorter perspective

However, the sustained rise in prices may deter new customers from purchasing gold, thus preventing volume-based growth over the longer term.

Market Reaction: Gold Financiers vs Jewellery Stocks

The import duty hike created two very different stories on Dalal Street on the same day. The table shows you understand the captures the split in market reaction clearly.
 

Analysts note that higher gold prices increase the value of collateral, which may support loan growth and improve loan-to-value ratios for players such as Muthoot Finance and Manappuram Finance. 

The same price rise, however, squeezes jewellery retailers whose customers become more price-sensitive.

What This Means for Indians Who Own Gold or Have Gold Loans

For the tens of millions of Indians who have pledged gold for a loan, rising gold prices are a quiet financial cushion. 

For gold loan NBFCs, any increase in gold prices automatically raises the value of collateral, which reduces the lender's risk and allows for higher disbursements per unit of gold pledged. 

Borrowers whose existing loans were taken at lower gold valuations may now find themselves able to top up their loan or get better terms at renewal.

For households planning to buy gold jewellery, the duty hike is a direct price increase. 

A 15% import duty pushes up the landed cost of gold, which jewellers pass on to consumers. 

Gold has surged significantly in 2025 and into 2026 already, and gold finance stocks have climbed between 23.5% and 34.7% in FY26 alone, according to Ace Equity data. 

The latest duty hike extends that trend.

Analysts Say the Gold Loan Sector Remains a Strong Structural Story

Analysts caution that persistently high gold prices could moderate fresh jewellery purchases over time, limiting the supply of new household gold available for pledging. 

Higher volatility in gold prices may also increase risks around collateral management. 

One analyst noted that the positives from a gold price rally are already partially priced into gold finance stocks.

Independent market analyst Deepak Jasani said there is still upside left in gold finance stocks, as neither gold prices nor market sentiment are expected to reverse anytime soon. 

He noted that even after the strong run-up, Muthoot and Manappuram offer relative value compared to broader financials. 

The key for investors is distinguishing between price-driven AUM growth and sustainable business expansion.

Conclusion

India's gold import duty hike created clear winners and losers in the market. Gold loan NBFCs gained from rising collateral values while jewellers faced demand risk. For investors, the gold lending sector remains compelling, but entry points and collateral quality matter more than ever now.

FAQs

Why is Gold continuing to move higher while all other assets seem to be moving lower?

The reason why gold continues to move higher while other assets move lower is that gold is considered a safe haven asset in periods of high inflation, geopolitical tension in the Middle East, and low faith in fiat money.

What price do you expect gold to reach this year?

According to institutional outlooks for 2026, the price of gold is expected to reach $5,000–$5,500 per ounce at the end of the year due to the high demand for gold from central banks and geopolitical tension.