L&T Finance shares rise as firm buys Paul Merchants Finance's gold loan business

Shares of L&T Finance (LTF), a non-banking financial company, gained nearly 3% on Monday after L&T's arm acquired the gold loan business of Paul Merchants Finance (PMFL). This strategic acquisition involves the transfer of a ₹1,350 crore gold loan book, along with 130 branches and approximately 700 employees, to L&T Finance. The move is part of L&T Finance's broader risk-calibrated inorganic growth strategy and is expected to strengthen its position as a diversified retail-focused lender under its Lakshya 2026 roadmap. 

The stock rose 2.79% to Rs 195.15 against the previous close of Rs 189.85. Market cap of the firm climbed to Rs 48,174 crore.    

The acquisition not only marks L&T Finance's formal entry into the gold loan segment but also expands its offerings in secured loans. LTF plans to leverage its existing rural franchise, consisting of 1.6 crore customers and a 20,000-strong field workforce, to cross-sell gold loans across various geographies.

Sudipta Roy, Managing Director and CEO of LTF, stated, "The gold loans business fills a crucial gap in our portfolio. It introduces a secured, high-yield product benefiting both rural and urban customers." He further added that the acquisition aligns with the company's five-pillar strategy focused on expanding customer acquisition and product offerings. This integration is seen as a seamless fit within LTF's long-term strategy, enhancing its ability to offer high-yield, secured products to a broader customer base.

Paul Merchants Finance Chairman and MD, Sat Paul Bansal, expressed confidence in L&T Finance's capability to advance the gold loan business. He indicated that the transaction fits well within LTF's broader strategic approach, suggesting an easily integrable solution that aligns with their objectives. The acquisition is anticipated to further solidify LTF's market position, providing a robust platform for growth in both rural and urban lending sectors, and enabling the company to optimize its resources effectively.