Godrej Capital Eyes Rs 1 Lakh Crore AUM In Five Years; Bets On Gold Loans, Affordable Housing

Godrej Capital is targeting a loan book of Rs 1 lakh crore over the next five years as it expands into new lending segments, with gold loans emerging as one of its key growth drivers and affordable housing finance set to become another focus area, MD & CEO Manish Shah told NDTV Profit in an interaction.

The non-banking financial company recently entered the gold loan business, viewing it as one of the fastest-growing retail lending segments while also helping diversify its retail loan portfolio. The company is targeting a gold loan book of around Rs 5,000 crore over the medium term.

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To strengthen its presence in southern India, Godrej Capital recently acquired Kanakadurga Finance, a move that will deepen its footprint in Andhra Pradesh while also adding experienced talent to the organisation. The company said it remains open to inorganic growth opportunities if they align with its long-term strategy.

Despite intensifying competition across financial services, including gold loans and wealth management, Godrej Capital believes India's expanding credit market offers enough room for multiple players to grow. The company plans to rely on technology-driven underwriting and customer servicing to improve efficiency while scaling its lending business.

Even as it pursues aggressive growth, the company said it remains focused on maintaining asset quality. It follows a measured approach of incubating no more than two new businesses over a couple of years, allowing it to build expertise before expanding further. Its lending model also remains selective, with approval rates below 50% across most products.

The lender has diversified risks across products and geographies and currently maintains a cost of risk of around 0.7%, among the lowest in the industry. It also avoids certain higher-risk lending products, with management indicating that the journey towards the Rs 1 lakh crore AUM target will be driven by balanced growth rather than chasing volumes.

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Beyond gold loans, Godrej Capital plans to scale up its personal loan business and significantly expand its affordable housing finance operations. It has set a target of disbursing Rs 1,000 crore in affordable housing loans. The company has also entered the wealth management business and sees asset management as a logical extension of its financial services platform over time.

On its capital plans, Godrej Capital indicated that lending businesses are well suited for public listing because of their higher capital requirements. The company sees an initial public offering as a possibility in the next four to five years. In the current financial year, its promoters are expected to infuse Rs 5,000 crore into the business. As it moves closer to a potential listing, the company will evaluate whether future capital requirements should be met through additional promoter funding or external investors.

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