Godrej Capital, the financial arm of Godrej Group, is set to enter the affordable housing loan market, aiming to increase its Assets Under Management (AUM) from INR 13,000 crores to INR 17,000 crores by year-end, with a target of INR 50,000 crores by 2028. The company plans to focus on small loans for homebuyers and SMEs, expanding into the MSME sector through partnerships like Creamline Dairy to provide financial support to farmers. With projected profits of INR 175 crores this fiscal year, Godrej Capital also plans to launch an IPO within 3.5 years as part of its growth strategy.
The Managing Director for Godrej Capital - the financial services division of Godrej Group - recently announced that the company is preparing to enter the affordable housing loan market, aiming to increase their Assets Under Management (AUM) to INR 17,000 crores by the end of the year. The company currently has an AUM of INR 13,000 crores, and plans to more than double this figure by March 2026. As reported by PTI, Shah also added that the long-term goal of the company is to reach an AUM of INR 50,000 crores by 2028.
The company also aims to direct its strategy towards small and medium enterprises (SME), as well as micro, small, and medium enterprises (MSME). By the end of the year, the company will further their operations by entering the affordable housing loan segment. Shah said that the company plans to concentrate on offering small loans to those looking to buy affordable homes, and capitalise on the growing affordable housing market in the country. The current plans for the company to offer the loans in one to two states, after which it will widen their reach to other areas based on the customer reception.
This new initiative also corresponds with the government's 'Housing for All' mission under the Pradhan Mantri Awas Yojna, contributing financing for homebuyers in the low-income segment and improving the company's market standing. The company will also venture into the SME segment with a dairy farming initiative, having offered 25 loans for the same as of now. Godrej Capital is also maximising the resources of its group firm, Creamline Dairy, which collects milk from local farmers. Through this, the company provides small loans to these farmers to grow their businesses, which they usually use to purchase more livestock and increase milk production. Godrej Capital also plans to launch an IPO within the next 3.5 years. Shah mentioned that since the company is a mid-layer Non-Banking Financial Company (NBFC), and not an upper layer NBFC, the RBI deadline for listing on the stock exchange does not apply to them.
According to the regulations from the Reserve Bank of India, any company classified as an 'upper-layer NBFC' has to be listed on the stock exchange within three of years of the classification. Godrej Capital commenced operations in 2020, and reported a profit of INR 55 crores for the previous year. The company has forecasted a profit before taxes of INR 175 crores for this fiscal year, signalling a strong growth trend. Godrej Capital launched unsecured business loans across 31 markets in July 2023 to support MSMEs and currently holds a portfolio worth INR 2,000 crores in this market niche.
Godrej Capital's strategic entry into the affordable housing loan market, alongside its focus on SME and MSME sectors, aims to significantly boost its Assets Under Management and market presence. With ambitious growth targets and plans for an IPO, the company is well-positioned to leverage government initiatives and internal resources for sustained expansion and profitability.
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