Gold monetisation: Manappuram, MCX among Jefferies top stock picks

Manappuram Finance has emerged as Jefferies’ most popular play on the rising monetisation of family gold by means of formal lending channels, because the sustained rally in gold costs within the final one yr (up 35 per cent to $4,600 an oz) has boosted family wealth and created room for additional gold-backed borrowing, based on their evaluation.

Different potential beneficiaries of upper gold costs, the brokerage stated in a current notice coauthored by Mahesh Nandurkar, Jefferies’ managing director, Abhinav Sinha and Priyank Shah, embody Titan and Kalyan Jewellers, Multi Commodity Alternate of India (MCX), and gold lenders reminiscent of IIFL Finance and Muthoot.

The choice for gold-linked performs comes towards the backdrop of a pointy enhance within the worth of gold held by Indian households. Gold costs have stayed above $4,000 an oz (oz) for a few yr, whereas home households are estimated to carry round 25,000 tonnes of the metallic, based on Jefferies’ estimates.

“The worth of those holdings stood at round $3.9 trillion as of March 2026, up practically $1.9 trillion over the previous two years. This compares with round $111 billion value of gold held by the Reserve Financial institution of India,” Jefferies stated.

Whereas gold has historically been a dormant retailer of worth for Indian households, the present value upcycle is more and more turning the asset right into a supply of liquidity by means of gold-backed loans, the brokerage believes.

A ten per cent enhance in gold costs, based on their calculations, may generate round $400 billion in further family wealth and assist one other $20-25 billion in gold loans. “Collectively, these may present one other 80-100 foundation factors of tailwind to GDP and spending,” Jefferies stated.

Gold loans

Gold loans, as per the notice, have been estimated at round $197 billion as of March 2026, having grown practically 73 per cent in greenback phrases over the previous two years. They now account for round 7 per cent of whole financial institution and non-bank monetary firm (NBFC) credit score.

“The monetisation of family gold by means of financial institution and NBFC loans has elevated from lower than 4 per cent earlier than 2020 to round 5.1 per cent in March 2026. Even so, solely round 15 per cent of family gold holdings are estimated to be monetised, assuming a loan-to-value (LTV) ratio of 65 per cent and factoring in further lending by means of unorganised channels,” Nandurkar, Sinha and Shah wrote.

Including: “This factors to vital headroom for additional gold monetisation. Gold loans as a proportion of family gold holdings have declined by round 80 foundation factors from March 2024 ranges, as lending has didn’t maintain tempo with the sharp rise in gold costs.”

A reversal on this development over the following two years, Jefferies estimates, may end in an 8-10 proportion level enhance within the share of gold holdings being monetised, translating into an extra $15-20 billion in gold loans yearly.

Mannequin portfolio

Towards this backdrop, Jefferies has added Manappuram as the popular inventory to play the gold monetization theme, funded by modest trims throughout choose lenders. It has additionally changed Jindal Stainless with Hindustan Zinc to achieve publicity to the silver theme in its India mannequin portfolio.

“Amongst different additions, Meesho has been included as a play on mass discretionary consumption, whereas Navin Fluorine has been added on progress alternatives throughout CDMO, cooling merchandise, specialty chemical substances and superior supplies. These are anticipated to drive a 23 per cent EPS CAGR throughout FY26-29E. Ambuja has been eliminated,” Jefferies stated.

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