Godrej to integrate NBFC, housing finance arms in new entity

The Godrej Group, one of India's storied industrial conglomerates, Monday sought to mainstream its consumer-finance business by building a bespoke structure that would house both non-bank lending and mortgage funding as credit becomes the first definitive step on the consumption ladder for an overwhelming majority of new-age shoppers.

Godrej Capital, the new overarching entity, will now house the NBFC Godrej Finance and home financier Godrej Housing Finance. Godrej Industries plans to invest ₹1,500 crore into Godrej Capital, henceforth the holding company for the group's financial services offerings.

For its part, Godrej Capital plans to build a balance sheet of ₹30,000 crore by 2026 and will expand its retail operations in six new cities this financial year.


"We envision Godrej Capital becoming a new-age, leading retail financial services institution," said Manish Shah, MD, Godrej Capital. "We will extend our home loan and loan against property business to six more markets this financial year. This will soon be followed by our foray into affordable housing and unsecured cash flow-based financing."

Its internal forecasts showed the business will require a total of ₹5,000 crore of equity investment by 2026. So far, both the businesses (NBFC & HFC) are close to achieving a balance sheet of ₹10,000 crore within three years of launch. The businesses have so far serviced more than 4,500 customers. The group is targeting a revenue contribution of 40% from Loan Against Property and the remaining 60% from home loans.

Godrej Capital currently has its footprint across Mumbai, Bengaluru, Delhi NCR, Ahmedabad, and Pune and will soon be operational in six new cities - Jaipur, Chandigarh, Hyderabad, Chennai, Indore and Surat.

"Godrej Capital will form a key pillar in the overall growth of the Godrej Group," said Pirojsha Godrej, Chairman, Godrej Capital. "We started with home loans in select geographies in 2020. Having seen strong customer acceptance of our offering, we are very optimistic about the prospects of our financial services venture and will be entering new markets and enhancing our reach across key target sectors and consumer segments."

Also, to fulfil business and geographic aspirations, the business aims to grow its team by 50% to approximately 500 people in FY23.

Going forward, the housing finance business and the NBFC will scale up home loans with major developers and diversify into affordable housing.