L&T Finance has bought the gold loan business of Paul Merchants Finance Pvt Ltd (PMFL) for ₹537 crores-in-a-move that has implications for the gold loan sector lines for the company as this puts the NBFC of the Larsen and Toubro Group into a profitable gold loan market and, thus, into the wider range of secured loan offerings.

The cash transaction entails a one-time cash payment totaling ₹537 crore and adjustment of amounts before closing. The deal is yet to receive regulatory approvals and is expected to close by the second quarter of the 2025-26 financial year.

With the purchase, an entire office-network of gold loan branches in well-maintained markets like Chandigarh, Punjab, Haryana, Delhi, Rajasthan, Gujarat, Madhya Pradesh, and Uttarakhand will be incorporated.

Moreover, the deal gives an exclusive, 24-hour centralized security access to L&T Finance for remotely monitoring all gold loan branches in its operations. It also adds about 700 employees and 130 branches to its workforce.

The gold loan business is estimated to have an asset under management (AUM) of around ₹1,000 crore, serving over 98,000 active customers-hence a very strong platform for the fast scaling up of operations.

"As far as acquisition is concerned," said Sudipta Roy, Managing Director and CEO of L&T Finance, "this acquisition will be a strong incremental step in our quest for sustainable growth, and strong returns. Gold loans would help fortify our portfolio with secured, high-yield products that target both rural and urban markets. It will expedite our gold loan business expansion by 36 months."

L&T Finance shares were trading down 1.30% at ₹148.80 as the market closed on February 7.