Godrej Capital to Enter Affordable Housing Loan Segment, Aims for Rs 17,000 crore AUM by FY25
Mumbai-based financial services provider, Godrej Capital, has set its sights on the affordable housing loan market, with plans to enter the segment by December. The company, which is the financial arm of the renowned Godrej Group, is aiming to increase its assets under management (AUM) to Rs 17,000 crore by the end of the current financial year. Managing Director, Manish Shah, shared the company’s ambitious growth plans, highlighting their long-term goal of reaching an AUM of Rs 50,000 crore by March 2028.
Strategic Focus on Small and Medium Enterprises and Affordable Housing Segment
Godrej Capital’s strategic focus is set on catering to the small and medium enterprises (SME), micro, small, and medium enterprises (MSME), as well as the home loan segments. In line with their expansion efforts, the company will launch affordable housing loans, beginning with one or two states and expanding based on customer response. Godrej Capital aims to tap into the growing demand for affordable housing in India, particularly to serve the lower-income homebuyers.
Supporting the Government’s ‘Housing for All’ Mission
This move by Godrej Capital is aligned with the government’s ‘Housing for All’ mission, which includes schemes like the Pradhan Mantri Awas Yojana. By providing crucial financing options for lower-income homebuyers, Godrej Capital hopes to contribute to the affordable housing ecosystem in the country, while simultaneously enhancing its own growth prospects. This initiative is expected to complement the various government efforts to make housing accessible to all segments of society.
Advancing SMEs through Innovative Financing Programs
In addition to affordable housing loans, Godrej Capital is also actively involved in empowering small and medium enterprises. The company has launched a dairy farmer financing program as part of its SME initiatives. Leveraging their group firm, Creamline Dairy, which sources milk from local farmers, Godrej Capital offers loans to small farmers to help them scale their operations. These loans primarily facilitate the acquisition of additional livestock, enabling farmers to increase their milk production.
IPO Plans and Profitability
As for Godrej Capital’s future plans, the company intends to launch its initial public offering (IPO) within the next three and a half years. Manish Shah clarified that as a mid-tier non-banking financial company (NBFC), they are not bound by a Reserve Bank of India deadline. Upper-tier NBFCs, on the other hand, are required to be listed within three years of receiving the designation. This approach provides Godrej Capital with sufficient flexibility and time to prepare for their IPO.
With regard to profitability, Godrej Capital reported a profit of Rs 55 crore in the fiscal year 2024. For the current financial year, the company has set a target of achieving a profit before tax of Rs 175 crore, indicating a strong growth trajectory. The continued growth in revenue and profitability has positioned Godrej Capital as a key player in the financial services sector.
Expansion Plans and Market Presence
Since its inception in 2020, Godrej Capital has expanded its operations from four cities to its current presence in 30 cities across the country. The company has plans to further expand to 40 cities across 180 locations. Their diverse portfolio includes unsecured business loans for MSMEs, offered in 31 markets since July 2023. This segment alone amounts to a ?2,000 crore portfolio, showcasing Godrej Capital’s commitment to supporting and empowering small businesses across the country.
In conclusion, Godrej Capital is set to make its mark in the affordable housing loan segment, with strategic opportunities in the SME space. The company’s robust growth plans, evident from their ambitious asset under management targets, underline their commitment to providing financial solutions tailored to the needs of various consumer segments. With their expansion and market presence solidifying year after year, Godrej Capital is geared towards becoming a leading player in the financial services sector in India.
