In the week ending April 13, 2025, Indian midcap stocks faced notable declines, with Muthoot Finance and Indraprastha Gas Ltd (IGL) among the most affected. Muthoot Finance’s shares plummeted by approximately 14% over two days, primarily due to the Reserve Bank of India’s (RBI) announcement of forthcoming comprehensive regulations for gold-backed loans.
These regulations include a uniform Loan-to-Value (LTV) cap of 75% and stricter monitoring of gold loans for income generation, prompting a selloff among investors. Other lenders with gold loan exposure, such as Manappuram Finance and IIFL Finance, also experienced declines following the announcement.
A Significant Drop
IGL’s stock also saw a significant drop, contributing to the overall downturn in the midcap segment. Global trade uncertainties affected broader market sentiment, with benchmark indices ending the week 0.3% lower. Despite a late rebound on Friday following a 90-day U.S. tariff pause, cautious investor sentiment persisted.
The India VIX, a measure of market volatility, remained elevated, indicating continued investor caution. Analysts suggest that while the Nifty’s uptrend might continue, the high volatility warrants careful stock selection, especially focusing on high dividend-yield options and outperformers.
Investors are advised to stay informed about regulatory changes and global economic indicators that could impact market dynamics in the coming weeks.
