Cholamandalam Finance Eyes Rs 1,000 Crore Gold Loan Milestone by FY26 End
Cholamandalam Investment and Finance Company Limited, commonly known as Chola Finance, is poised to achieve a significant milestone in its gold lending business. The financial services arm of the renowned Murugappa Group anticipates its gold loan portfolio will surpass the Rs 1,000 crore mark by the conclusion of the financial year 2025-26.
Rapid Growth in Gold Loan Disbursements
Since making its strategic entry into the gold loan segment in May of the previous year, the Chennai-based Non-Banking Financial Company (NBFC) has demonstrated impressive growth. As of December 2025, the company had disbursed a total of Rs 1,339 crore in gold loans. This includes a substantial Rs 772 crore disbursed specifically during the third quarter of FY26 alone.
The assets under management (AUM) for this burgeoning portfolio stood at Rs 980 crore by the end of December 2025. "This business is performing exceptionally well," stated Arul Selvan D, President and Chief Financial Officer of Cholamandalam Finance.
Focus on Risk Management and Portfolio Quality
Selvan emphasized that the company's initial priority has been ensuring the authenticity and safety of the gold accepted as collateral. "Our primary concern was mitigating the risk of spurious gold. To address this, we have implemented robust systems, stringent controls, and comprehensive verification mechanisms," he explained during an interview.
He further noted that the appreciating price of gold has contributed positively to the portfolio's performance, yielding decent returns. With these factors in place, Selvan expressed confidence, stating, "We should easily cross the Rs 1,000 crore mark by the end of March 2026."
Operational Footprint and Portfolio Metrics
The gold loan business is currently operated through a network of 118 dedicated branches strategically located across the southern and eastern regions of India. Despite being a relatively new vertical, the gold loan portfolio already constitutes 4% of the company's total disbursements year-to-date as of December 2025.
In terms of lending parameters, the loan-to-value (LTV) ratio was maintained at 75%. However, Selvan indicated an adjustment is underway. "Following new regulatory guidelines, the LTV is moving towards 85%. We plan to scale up our operations progressively as we continue to establish new branches," he added.
Future Expansion Plans
When questioned about the future trajectory of the gold loan vertical, Selvan confirmed plans for expansion in the upcoming financial year. "We are actively working on the business plan for the next phase of growth. However, specific target numbers for the forthcoming financial year cannot be disclosed at this juncture," he stated.
This growth in the gold loan segment contributes to the company's overall robust financial standing. Cholamandalam Finance reported a total AUM of Rs 2,27,770 crore as of December 31, 2025, underscoring its significant position in the Indian financial services landscape.
