KERALA-based Muthoot Capital Services (MCSL) on Thursday said it will soon introduce a product wherein the company will provide loans against gold exchange traded funds (ETF).
This is the first time such a loan finance scheme is being introduced, MCSL managing director Thomas George Muthoot said.
Gold ETFs are issued by asset management companies against 99.5 purity gold kept by them with depositories. The securities are in dematerialised form and can be easily transferred, encashed and traded in stock exchanges, he added.
By introducing this product, the company would be putting to use the group's core competence in granting loan against gold to provide liquidity for investors in ETF , thereby promoting the popularity of ETF , he said.
In addition, the company has introduced Smart Plus Auto Loan under which the full cost price of the vehicle is given as loan enabling the borrowers to leverage their gold ornaments against the margin requirement.
The company is expecting a very good response to this product.
In the current year, MCSL plans to give auto loans of about Rs 250 crore to Rs 300 crore in South Indian states and Goa. Last year, the company had dispersed Rs 138 crore as auto loans, he said.
On the rights issue, Muthoot said the company was awaiting Sebi approval and the price range has not been fixed.
The company which announced its results for the year ending March 31, said its net profit increased from Rs 7.17 crore to Rs 9.66 crore, recording an impressive growth of 34.75 per cent compared to the last year.
