Business News›Markets›Stocks›News›Muthoot Finance | Manappuram Finance: Muthoot or Manapurram: Which one's better placed to take advantage of global rumblings?
Muthoot or Manapurram: Which one's a better play on rising gold prices?
Synopsis
When there is a war, the stock market becomes extremely volatile. Investors withdraw funds from the market and place them in more stable asset classes. Manappuram Finance and Muthoot Finance are two listed companies whose primary business is lending against gold. Has the crisis helped them?
How does rising gold prices help Muthoot and Manappuram? Suppose a person borrows from one of the gold financing players, and the prices of the metal rises, the value of the collateral used to secure the loan increases. This is because if a borrower comes with gold worth Rs 100 as collateral, the gold financing company gives a loan of only Rs 70. So there is always a buffer. So where do the current market conditions put these players? The
Get Unlimited Access to The Economic Times 
Why ?
Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors
Stock analysis. Market Research. Industry Trends on 4000+ Stocks
Clean experience with
Minimal AdsComment & Engage with ET Prime community Exclusive invites to Virtual Events with Industry Leaders A trusted team of Journalists & Analysts who can best filter signal from noise
