A ₹318 crore bet on household gold, India's most under-tapped asset.
NEW DELHI: Tata Capital’s board has cleared the acquisition of an 88.6% controlling stake in Yogakshemam Loans commonly known as Yogloans. The deal values the Kerala-based gold loan lender at a pre-money valuation of up to ₹318 crore and includes a fresh capital infusion of ₹93 crore. The transaction combines a secondary purchase of shares from existing investors with new primary funding meant to fuel expansion.
Beyond the headline number however lies a bigger story. India’s gold loan market has nearly tripled since March 2023 rising from roughly ₹6.3 lakh crore to almost ₹19.4 lakh crore by March 2026. Tata Capital’s move therefore is not an isolated bet but part of a broader scramble among large lenders to capture a segment that regulators have effectively pushed into favour.
Why the Shift Toward Gold
Unsecured lending in India has come under sustained regulatory pressure over the past two years. As a result the Reserve Bank of India raised risk weights on unsecured retail exposure making such loans costlier to hold on balance sheets. Consequently growth in unsecured credit slowed to under 10% year on year by late 2025. Lenders needing fresh avenues for growth therefore turned toward secured assets and gold emerged as the natural choice given its liquidity and low default risk.
Meanwhile a sustained rally in gold prices has quietly transformed the economics of the business. Since higher prices raise the value of pledged jewellery households can now borrow more against the same quantity of gold. Average ticket sizes accordingly doubled from about ₹0.98 lakh in FY23 to nearly ₹1.96 lakh by FY26. NBFC gold loan books alone grew almost 70% year on year touching ₹3.30 lakh crore by May 2026 making it the fastest expanding retail credit category in the shadow banking space.
The Yogloans Opportunity
For Yogloans the deal offers more than just capital. The Thrissur-headquartered lender reported a turnover of ₹140.38 crore and a net profit of ₹14.21 crore for the year ended March 2026 with a net worth of ₹115 crore. Its gold loan book has grown at a compounded rate of 25% between FY22 and FY26 though it remains modest at around ₹602 crore against Muthoot Finance’s over ₹1 lakh crore portfolio.
What Yogloans lacks in scale it makes up for in specialisation. Analysts estimate its focused gold book could deliver a return on assets of nearly 5% by FY28 compared with Tata Capital’s own consolidated projection of around 2.2% to 2.3%. In effect the acquisition offers Tata Capital a shortcut into a high-margin niche it would otherwise take years to build organically.
Additionally Tata Capital’s AAA credit rating could sharply lower Yogloans’ cost of borrowing which currently sits between 10.5% and 12.5%. Access to the parent’s funding lines at rates closer to 7% could compress costs meaningfully improving margins or allowing more competitive pricing for borrowers.
Regulatory Runway and Open Questions
The transaction nonetheless remains some distance from completion. Since regulated financial entities require Reserve Bank approval for ownership changes the deal is expected to close only around March 2027 pending fit and proper clearances. This eight month runway matters because gold lending is now governed by a stricter rulebook that came into effect from April 1, 2026. The revised framework replaced the earlier flat 75% loan to value cap with a tiered structure alongside stricter tenure limits and faster collateral return timelines.
Questions also remain around integration. It is unclear whether Tata Capital will fold Yogloans’ 162 branches into its own network or run them separately. Similarly there is no clarity yet on whether Yogloans’ existing vehicle and microfinance books will be wound down to focus purely on gold.
A Crowded Race With a Ceiling
Tata Capital is not alone in this pursuit. L&T Finance had earlier acquired Paul Merchants Finance’s gold loan business and has since scaled its own portfolio sharply. As more conglomerates chase the same underpenetrated pool of household gold estimated at over 22,000 tonnes, competition for market share is likely to intensify.
Some analysts caution that the entry is well timed with gold prices near record highs but that any future price correction could slow ticket size growth and expose the limits of this expansion. Whether Tata Capital’s institutional scale can coexist with the fast, relationship-driven culture that gold lending typically demands remains a question only time and execution will answer.
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