Shares of L&T Finance Holdings Ltd surged by 2.5% on Wednesday, June 5, 2025, to hit a 52-week high of ₹172.40, after the company announced the acquisition of the gold loan business of Paul Merchants Ltd, a move that strengthens its position in the retail lending segment.
The acquisition underscores L&T Finance’s continued pivot toward expanding its retail loan portfolio and reducing its exposure to wholesale lending. The company has been strategically building out verticals such as rural finance, two-wheeler loans, personal loans, and housing finance — and gold loans are a critical part of this retail play.
Stock Performance
As of 10:30 AM, L&T Finance shares were trading 2.5% higher at ₹172.40 on the BSE, marking the stock’s highest level in the past 12 months. Over the last six months, the stock has gained more than 30%, outperforming the broader Nifty Financial Services index.
Deal Highlights
- Target Company: Paul Merchants Finance, a non-banking financial company (NBFC) focused on gold loans.
- Nature of Deal: Asset acquisition of gold loan portfolio and branch infrastructure.
- Strategic Aim: Strengthen L&T Finance’s presence in North India and improve cross-selling opportunities in semi-urban and rural markets.
With the addition of Paul Merchants’ assets, L&T Finance is expected to get access to a strong retail customer base and branch network, which will enhance its ability to deepen presence in Tier 2 and Tier 3 towns.
Management Commentary
A company spokesperson said:
“This acquisition is in line with our Lakshya 2026 strategy to build a strong and sustainable retail-focused NBFC. The Paul Merchants gold loan business offers us immediate scale, network expansion, and portfolio diversification.”
Financial Outlook
Analysts are bullish on L&T Finance’s trajectory, citing strong execution of its retail expansion plan. The company reported a 37% YoY growth in retail loan disbursements in the last quarter and aims to grow its retail book by 20-25% CAGR through FY26.
Brokerage houses have reiterated a ‘Buy’ rating on the stock, with target prices ranging between ₹185 and ₹200, anticipating further upside from strategic acquisitions and improving asset quality.
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