Godrej Capital, the financial services arm of the Godrej Group, is gearing up to enter the affordable housing loan segment by December, with plans to grow its assets under management (AUM) to Rs 17,000 crore by the end of the current financial year, its Managing Director Manish Shah said on Wednesday.
The company currently manages an asset base of Rs 13,000 crore, after reaching an AUM of Rs 10,000 crore in FY24. It is now aiming to increase this to Rs 17,000 crore by FY25, with a target of expanding to Rs 30,000 crore by March 2026 and a longer-term goal of achieving Rs 50,000 crore in AUM by March 2028, Shah stated.
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 in FY24. For the current financial year, Godrej Capital aims to clock a profit before tax of Rs 175 crore, showcasing its robust growth trajectory.
Nearly five-year ago Godrej Capital began operations in four cities and gradually expanded. In FY24, the company had offices in 30 cities and now aims to be present in 40 cities across 180 locations, Shah said.
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.
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First Published: Sep 18 2024 | 9:01 PM IST