New Delhi, Feb. 17 -- Gold is shining bright, with price above Rs.80,000 per 10 grams. Rising price of the yellow metal means higher value of collateral for gold lenders and a boost to their assets under management (AUM). In this scenario, Muthoot Finance Ltd is the best placed. It's gold loan AUM surged 34% year-on-year and 8% sequentially in the December quarter (Q3FY25). Higher gold prices and new customer additions led by strategic transformation of Muthoot Money branches for gold loan disbursement helped.

It has maintained its AUM growth guidance for FY25 at 25%-a figure that was revised upwards from 15% in Q2FY25.

In general, to beat cyclicality in the gold lending business, Muthoot and peers are diversifying into non-gold lending...