L&T Finance expects gold loan biz to contribute over 10% to total loan book in next 5 years
3 min read
L&T Finance Chief Operating Officer Raju Dodti
L&T Finance Ltd, which ventured into gold lending last year, anticipates that its gold loan segment will account for over 10 % of the total loan book within the next five years, up from roughly 3 % today.
Key Takeaways
- L&T Finance expects its gold loan business to exceed 10% of its total loan book within five years, up from about 3% today.
- The NBFC plans to open at least 500 new branches annually through 2031 to expand gold lending.
- L&T Finance entered gold lending in June 2025 by acquiring Paul Merchants Finance’s gold loan business.
- The gold loan portfolio, initially about Rs 1,300 crore, grew nearly 180% in the past year.
To expand the gold loan business, the NBFC plans to open at least 500 new branches annually through 2031.
“I wouldn’t be shocked if the gold loan portfolio exceeds 10 % of the loan book by 2031. I don’t see any obstacle to that occurring,” said L&T Finance COO Raju Dodti to businessline.
L&T Finance entered the gold lending arena by acquiring the gold loan business of Paul Merchants Finance (PMFL), a subsidiary of Paul Merchants, a deal finalized in June 2025.
“When we took it over, the gold loan book was about ₹1,300 crore. We recorded nearly 180 % growth in the past year,” Dodti noted. At the close of Q1 this fiscal, the gold loan book stood at ₹3,829 crore.
Discussing drivers behind the strong growth of its gold loan portfolio, the COO remarked, “Gold is abundant in the country. There is a substantial stock that can be turned into formal credit. The shift will occur as informal gold lending moves into the formal sector. That’s the initial step, and it’s where gold finance firms and L&T Finance’s offering become valuable.”
For the NBFC, the secured‑to‑unsecured loan mix currently sits at 56:44. With the gold loan book growing, the aim is to raise the secured portion. “By 2031 we expect the split to be around 60:40,” Dodti said. “That’s the target we’re pursuing.”
Apart from gold loans, in the secured loan portfolio, the company has home loans, loan against property, micro loan against property, two-wheeler loans and tractor or farm finance, among others.
For gold finance, active branches stood at 343 across the country at the end of the first quarter of this financial year. “We are expanding branches and we want to end this year with upward of 800. We see no reason that we will not set up at least 500 branches every year going forward during the Lakshya 2031 period,” Dodti added.
L&T Finance aims to continue its transformation into a risk-first, tech-first, AI-native retail financial institution under its Lakshya 2031 strategy.
Published on August 18, 2026
