Shriram City aims to grow gold loan book to Rs 15,000-20,000 cr over next 5 yrs

"We will target growing the gold (loan) book to Rs 15,000 crore over five years. In the south, we have a strong franchise for gold loans, and the majority of our business comes from this region. We will replicate in the North the best practices that have worked for us and look at profitable growth pan-India," Shriram City MD and CEO Y S Chakravarti said in a release. Demand for gold loans has risen over the last two years. Its portfolio has contributed 13 percent of the Assets Under Management (AUM) as of December 2021 against 10 percent in the previous year.

Going forward, the company is targeting an average gold loan ticket size in the range of Rs 50,000, with a limited Loan to Value (LTV) at 75 percent, leaving the scope of the marginal requirement for additional margins in times of adverse gold price fluctuations. Over a period, the company has seen the life of its loan in the range of 5-6 months despite the usual tenure norm of 12 months.

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Shriram City has 986 branches and an employee strength of 27,000 across the country as of December 31, 2021. It offers loans for two-wheelers and SMEs as well.