Godrej Capital to enter affordable housing loan segment, eyes AUM of Rs 17,000 cr by Dec-end

New Delhi: Godrej Capital, the financial services arm of the Godrej Group, is gearing up to enter the affordable housing loan segment, with plans to grow its assets under management (AUM) to Rs 17,000 crore by the end of 2024, its Managing Director Manish Shah said on Wednesday.

Currently, the company manages an asset base of Rs 13,000 crore, and by March 2026, Godrej Capital aims to increase this figure to Rs 30,000 crore and further look for a longer-term goal of achieving an AUM of Rs 50,000 crore by March 2028, he said here.

The company's strategic focus will be on the small and medium enterprises (SME), micro, small, and medium enterprises (MSME), and home loan segments.

As part of its expansion, Godrej Capital will make its foray into the affordable housing loan market by the end of the year.

"Our focus will be towards smaller loan amounts, aimed at meeting the needs of affordable homebuyers," Shah said, indicating the company's efforts to tap into the growing demand for affordable housing in India.

Initially, the company will roll out affordable housing loans in one or two states, expanding to other regions based on customer response.

The company's push towards affordable housing aligns with the government's 'Housing for All' mission under schemes like the Pradhan Mantri Awas Yojana. This move is expected to provide much-needed financing options for lower-income homebuyers, further boosting the company's growth prospects.

With regard to the SME segment, Godrej Capital said it has made a beginning with dairy farmer financing initiative. So far it has given just 25 loans under the initiative.

Leveraging the ecosystem of its group firm Creamline Dairy, which procures milk from local farmers, the company offers loans to small farmers to help them scale their businesses, typically by purchasing additional livestock to boost milk production.

On the IPO front, Shah said that Godrej Capital, which offers home loans, loans against property and business loans, plans to come out with the initial share-sales over the next three-and-a-half years.

"Godrej Capital is a mid-layer NBFC so we don't have an RBI (Reserve Bank of India) deadline for us. We are not an upper layer NBFC," he said.

NBFCs categorised as upper layer by RBI are required to be listed within three years of them being designated as an upper layer NBFC.

On the profitability front, the company, which began operations in 2020, registered a profit of Rs 55 crore last year. For the current financial year, Godrej Capital aims for a profit before taxes of Rs 175 crore, showcasing its robust growth trajectory.

Godrej Capital, which introduced unsecured business loans in 31 markets to empower MSMEs in July 2023, has a Rs 2,000-crore portfolio in the segment.