Ever wondered what happens to all that gold sitting in Indian lockers? As per the global brokerage house Jefferies, it might be doing a lot more than gathering dust, it could be adding a measurable boost to India’s Gross Domestic Product (GDP).In fact they have Manappuram Finance to the model portfolio, calling it its preferred bet on the accelerating shift of household gold into formal lending channels.
As per Jefferies, this model portfolio addition is “funded by modest trims across select lenders.” Alongside Manappuram, the brokerage swapped Jindal Stainless for Hindustan Zinc for silver exposure, added Meesho as a mass-consumption play, and picked Navin Fluorine for its growth across Contract Development and Manufacturing Organisation (CDMO), cooling products, and specialty chemicals..
Why is Jefferies betting on these four companies? Here is a detailed analysis of the investment rationale.
Indian households are estimated to hold around 25,000 tonnes of gold. Jefferies report noted that these holdings were worth nearly US$3.9 trillion as of March 2026.
That is significantly larger than the value of gold held by the Reserve Bank of India and around four times the money Indian households have invested in stocks.
Gold has also remained important despite the rapid growth of equity investments. During FY26, around$96 billion flowed into equities, while nearly$79 billion was spent on gold imports.
The biggest beneficiary in Jefferies’ view could be the formal gold-lending industry.
Gold-backed loans have grown sharply and were estimated at around$197 billion as of March 2026. Furthermore, the brokerage estimates that only around 15% of household gold holdings are currently monetised.
Jefferies has added Manappuram Finance as its preferred play on this trend. The brokerage expects the company to benefit as more households shift towards formal lending channels to unlock the value of their gold.
It said, “We add Manappuram as our preferred play on the accelerating monetisation of household gold through formal lending channels.”
Jefferies has also replaced Jindal Stainless with Hindustan Zinc to gain exposure to the silver theme.
The company’s appeal in this context is not simply its exposure to gold. Hindustan Zinc is also a major silver producer.
The brokerage added, “We also replace Jindal Stainless with Hind. Zinc to gain exposure to the silver theme.”
Another addition is Navin Fluorine International.
Here, the investment argument is less about gold and more about company-specific growth. Jefferies sees growth opportunities across contract development and manufacturing organisation (CDMO), cooling products, specialty chemicals and advanced materials.
The brokerage expects earnings per share (EPS) to grow at a 23% annually on a compounded basis between FY26-FY29
Meesho is another addition, which Jefferies views as a play on mass discretionary consumption.
Rising gold prices increase household wealth, while gold-backed loans can provide additional liquidity. Since gold ownership is widespread among rural and lower-income households, the brokerage believes this could support spending at the lower end of the consumer market.
Jefferies also sees potential beneficiaries beyond its model portfolio. Titan and Kalyan Jewellers could benefit from higher gold prices, while MCX may gain from stronger gold trading activity.
Among lenders, as per Jefferies report, IIFL Finance and Muthoot Finance could benefit from rising demand for gold-backed loans.
Higher gold prices also mean a bigger import bill for India.Gold imports, including jewellery, increased from$36 billion in FY23 to$79 billion in FY26, equivalent to around 2% of gross domestic product (GDP).
Jefferies therefore sees a potential trade-off. Rising gold prices could boost household wealth and consumption, but they could also widen India’s current account deficit (CAD).
The brokerage believes a 10% rise in gold prices could create around$400 billion in household wealth and potentially generate another$20-25 billion in gold loans.
Together, that could provide an additional 80-100 basis points of support to gross domestic product and spending, according to Jefferies.