L&T Finance (LTF), a prominent non-banking financial company (NBFC) and a key subsidiary of the esteemed Larsen & Toubro Group, offers a comprehensive suite of financial services, spanning rural finance, housing loans, infrastructure financing, and investment management.
In a strategic bid to bolster its footprint in secured retail lending, LTF has announced its entry into the gold loan sector through the proposed acquisition of the gold loan business of Paul Merchants Finance (PMFL). This pivotal move aligns with the company’s ambitious Lakshya 2026 growth strategy.
The transaction, valued at ₹537 crore on a slump sale basis, is set to provide LTF with access to over 98,000 customers, 700 employees, and 130 branches spanning 11 states, including Punjab, Haryana, Delhi, Rajasthan, Gujarat, Madhya Pradesh, and Uttarakhand.
Sudipta Roy, Managing Director & Chief Executive Officer of LTF, highlighted that this acquisition would expedite the company’s gold loan growth trajectory by nearly 36 months, potentially adding ₹1,000 crore to its assets under management (AUM).
“This strategic move addresses a crucial gap in our secured high-yield portfolio, enhancing our offerings for both rural and urban clientele, and complementing our existing microfinance and rural lending operations,” he noted.
Meanwhile, Sat Paul Bansal, Chairman and Managing Director of PMFL, underscored the gold loan business’s impressive growth, achieving a compound annual growth rate (CAGR) exceeding 35% over the past 3-4 years. “Further scaling necessitated robust financial backing, and I am confident that LTF is the ideal strategic partner to propel this business forward,” he remarked.
L&T Finance reported a consolidated net profit of ₹626 crore for Q3 FY25, a 2% decline from ₹640 crore in Q3 FY24, primarily due to a surge in impairment costs, which more than doubled to ₹729 crore. The net interest margin fell to 10.33% from 10.93% a year ago.
However, the consolidated loan book grew by 16% YoY to ₹95,120 crore, driven by a 23% rise in the retail loan portfolio to ₹92,224 crore. Asset quality improved, with the gross NPA ratio declining to 2.85% from 3.19% and net NPA easing to 0.81% from 0.96% in Q2 FY25.
At 2:44 PM on February 10, 2025, L&T Finance Ltd. shares traded at ₹148.36 per share on the NSE.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Feb 10, 2025, 4:12 PM IST
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