The brokerage has added Manappuram Finance to its India mannequin portfolio as its most well-liked guess on the accelerating monetisation of family gold. It additionally sees Titan, Kalyan Jewellers, MCX, IIFL Finance and Muthoot Finance among the many potential beneficiaries of a continued rise in bullion costs.
The dimensions of the chance rests on a rare pool of personal wealth. Indian households held an estimated 25,000 tonnes of gold price $3.9 trillion as of March 2026, 4 occasions the worth of their inventory holdings and almost twice the cash saved in financial institution deposits.
Gold now represents about 25% of complete Indian family wealth. Its worth has elevated by $1.9 trillion in simply two years, dwarfing the $111 billion of gold held by the Reserve Financial institution of India.
Jefferies calls this India’s “hidden stimulus,” arguing that the financial impression of the gold rally stays underappreciated.
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Manappuram emerges as Jefferies’ most well-liked gold mortgage play
Jefferies assigned Manappuram Finance a 3% weight in its mannequin portfolio, funding the addition by way of modest reductions throughout chosen lenders, together with Bajaj Finance.Manappuram derived 82% of its FY26 income from gold-related lending, in response to the report. That compares with 90% for Muthoot Finance and 50% for IIFL Finance.
The brokerage expects formal lenders to learn as Indian households more and more use gold as collateral as a substitute of leaving it as a dormant asset.
Organised gold mortgage belongings beneath administration reached an estimated $197 billion in March 2026, rising 73% over two years. Gold loans now account for round 7% of complete lending by banks and non-banking monetary corporations.
The growth is already giant sufficient to affect the broader financial system. The rise in gold mortgage belongings throughout FY26 was equal to roughly 130 foundation factors of GDP, Jefferies estimated.
But the monetisation alternative stays removed from exhausted. Gold loans amounted to solely 5.1% of the worth of family gold in March 2026. Assuming a loan-to-value ratio of round 65% and together with borrowing from unorganised lenders, Jefferies estimates that solely about 15% of family gold is presently monetised.
The ratio of gold loans to family gold worth has declined by about 80 foundation factors from March 2024 as a result of the rise in lending has didn’t match the sharp appreciation in bullion costs.
A normalisation over the following two years might generate an extra $15-20 billion of gold loans yearly. Mixed with the impression of one other 10% improve in gold costs, this might present an estimated 80-100 foundation factors of assist to spending and GDP.
Titan, Kalyan and MCX amongst different beneficiaries
Jefferies recognized jewelry corporations Titan and Kalyan Jewellers as potential beneficiaries of an additional gold-price surge.
Gold, silver and jewelry contributed 100% of Kalyan’s FY26 income and 91% of Titan’s standalone income, in response to the report.
India’s gems and jewelry market, about 80% of which is linked to gold jewelry, has expanded quickly in the course of the bullion upcycle. Annual gross sales are estimated to have reached $118 billion in FY26, almost doubling from $61 billion in FY23 and representing a compound annual development fee of 25%.
MCX additionally affords materials publicity to the theme by way of commodity buying and selling. Gold-related exercise accounted for 41% of its FY26 income, whereas Hindustan Zinc derived 24% of its income from gold and silver.
Jefferies added Hindustan Zinc to its mannequin portfolio with a 2% weight, changing Jindal Stainless, to realize publicity to the silver theme.
The brokerage additionally added Meesho with a 2% allocation as a play on mass discretionary consumption. A stronger gold wealth impact might be notably related for consumption amongst rural and lower-income households, the place bullion possession is extra widespread than fairness possession.
Navin Fluorine was the fourth addition to the mannequin portfolio, with a 2% weight, changing Ambuja Cements. Jefferies’ rationale for the inventory was based mostly on development alternatives throughout contract growth and manufacturing, cooling merchandise, specialty chemical compounds and superior supplies relatively than direct publicity to gold.
Why gold could have a much bigger wealth impact than shares
Regardless of robust home funding flows into equities over the previous decade, gold stays a considerably bigger element of Indian family stability sheets.
Buyers put $96 billion into equities, together with mutual and pension funds, throughout FY26. In the identical 12 months, India spent $79 billion on gold imports.
Gold possession can also be way more broadly distributed than inventory possession. Jefferies stated this might permit rising bullion costs to assist consumption on the backside of the earnings pyramid and supply a buffer throughout poor monsoons.
Gold costs have remained above $4,000 an oz. for a few 12 months and have elevated 2.5 occasions over the previous three years. Jefferies expects costs to rise additional, supported by fiscal issues within the US and Japan and the constraints these place on financial coverage.
Participation in gold can also be widening past jewelry and bodily bullion. Belongings beneath administration of Indian gold exchange-traded funds elevated from $2.8 billion in March 2023 to $18.1 billion in July 2026.
The import invoice danger
The wealth impact comes with a big macroeconomic trade-off. India imports most of its gold, which means larger costs and stronger demand can place extra strain on the present account.
Gold imports, together with jewelry, elevated from $36 billion in FY23 to $79 billion in FY26, a compound annual development fee of 30%. The FY26 invoice was equal to round 2% of GDP, whereas gold accounted for about 10% of the nation’s complete imports.
The online impression is due to this fact a stability between stronger family wealth, larger credit score availability and consumption on one facet, and a bigger import invoice on the opposite.
For the inventory market, Jefferies’ thesis positions gold financiers as probably the most direct play on the monetisation pattern, whereas jewellers, MCX and mass-consumption corporations may gain advantage from the broader wealth impact. The longer gold stays elevated, the extra India’s huge inventory of family bullion begins to function not merely as financial savings, however as an engine of credit score and spending.
