L&T Finance plans to launch 500 new gold loan branches this fiscal year to expand its retail footprint. The move follows the company's entry into the sector last year and aligns with its retail-heavy growth strategy. Shares of the lender rose 3.27% to close at ₹315.05 on Tuesday.
L&T Finance has announced a major expansion in its gold loan business, with plans to open 500 new branches across India in the current fiscal year. This aggressive rollout is set to significantly increase the company's network, which consisted of 330 branches as of March 31, 2026. Following the announcement, the stock saw positive momentum, closing at ₹315.05 on Tuesday, up 3.27%.
Scaling the Retail Business
This branch expansion is part of the company's 'Lakshya 2026' strategy, which focuses on transforming the lender into a retail-focused, technology-driven financial institution. Gold loans have become a central part of this plan. L&T Finance first entered the gold loan segment in June 2025 by acquiring the gold loan business of Paul Merchants Finance for ₹537 crore. That deal provided the company with an immediate base of 130 branches and a loan book worth ₹1,350 crore, creating the foundation for the current expansion.
Financial Performance and Growth
The company’s focus on retail lending is reflected in its recent financial results. For the first quarter of the 2026-27 fiscal year, L&T Finance reported a 29% year-on-year increase in net profit to ₹900 crore, while net interest income grew by 28% to ₹2,920 crore. Retail loans now make up approximately 98% of the company's total loan portfolio, showing a clear shift away from wholesale or corporate lending.
Sector Context and Regulatory Environment
While the demand for organized gold loans remains high, the company is adjusting its growth plans to match new regulatory standards. In April 2026, the Reserve Bank of India (RBI) introduced an updated regulatory framework for gold lending, which includes stricter rules on how much can be lent against the value of gold and new repayment requirements. In response, L&T Finance has recalibrated its growth projection for the gold loan segment to 20-25% annually to ensure it stays aligned with these safety and compliance standards.
Monitoring Risks
Investors may keep an eye on several factors as the company executes this plan. The rapid addition of 500 branches comes with execution risk, meaning the company must manage staffing, operational costs, and local competition effectively to make these branches profitable. Additionally, because the business is based on lending against gold, the company’s assets are sensitive to fluctuations in gold prices. If gold prices drop sharply, the value of the collateral backing these loans decreases, which could pressure asset quality. The success of this expansion will depend on the company's ability to maintain high service standards while navigating the evolving regulatory environment.