Tata Capital ventures into gold loans by acquiring South India-focused Yogloans

Mumbai: The Tata Group’s Non-Banking Financial Company (NBFC) arm, Tata Capital, has announced the acquisition of South India-focused gold loans NBFC Yogloans as it looks to tap into the highly lucrative gold loan market. The company will be acquiring an 88.6% majority stake in the company, officially known as Yogakshemam Loans Limited, through a mix of capital infusion and share purchase. The company will invest about Rs.93 crore to support the company’s growth, with the transaction valuing the company at about Rs.318 crore. 

Yogloans currently has a network of 162 branches across Karnataka, Kerala, Tamil Nadu and Andhra Pradesh, with a total Assets Under Management (AUM) of Rs.708 crore. It has about 32,000 gold loan customers and has a strong capability in sourcing, underwriting and servicing with more than a decade in the gold loan business. 

Post-acquisition, the business will continue to be led by Mr. Unnikrishnan Idicharm Veetil and his experienced management team. Tata Capital will be consolidating the operations at a later stage, subject to regulatory approvals.

“This transaction marks Tata Capital’s entry into the gold loan business, adding a secured lending product with significant growth potential to our retail lending portfolio and supporting our strategy of building a diversified lending franchise. Yogloans has built a strong business over more than a decade under the leadership of Mr. Unnikrishnan and his team. We believe the combination of Yogloans’ market expertise with Tata Capital’s trusted brand, capital strength, technology and risk management capabilities will accelerate growth and create an enhanced experience for customers.” Mr. Rajiv Sabharwal, Managing Director & CEO, TCL, said in a press release.

“Over the years, we have built our gold loan business by focusing on customer experience, maintaining prudent lending practices and strengthening our presence across the markets we serve. We are proud of what the organisation has achieved and grateful for the trust placed in us by all stakeholders.” Mr. Unnikrishnan, Promoter & Managing Director, Yogloans, said. 

“We are delighted to be joining the Tata family, one of India’s most respected and trusted business groups. Tata Capital’s brand, financial strength and technology capabilities will help accelerate our growth. We look forward to working closely with the Tata Capital team as we build on the foundation created over the years and take the business to the next phase.”  he added.