Godrej Capital aims to double loan book this year

Godrej Capital, the financial services arm of the furniture to aviation group, expects to more than double its loan book to Rs 12000 crore by the end of fiscal year from Rs 5500 crore currently led by growth in loans to micro, small and medium enterprises (MSMEs). The late entrant into finance among storied business groups in India, started operations only in November 2020 and also expects to expand in the crowded mortgage market in India, CEO Manish Shah said.

“We have a Rs 4000 crore housing loan book right now which is expected to rise to Rs 7000 crore by the end of the fiscal. We have about 1000 MSME customers currently and that number will increase to 10,000 by the end of the current fiscal to take that loan book to Rs 5000 crore from Rs 1500 crore currently,” Shah said.

The company has two separate arms, Godrej Housing Finance for home loans and Godrej Finance to lend to MSMEs. Home finance started business in November 2020 and mostly lends to salaried home buyers in projects that the company has a tie up with.

On Monday, Godrej Capital launched digital platform Nirmaan to provide complimentary services to MSMEs, with an expectation of on boarding them as borrowers sometime later. The company said it has partnered with Amazon Global Selling (e-commerce exports programme), Onsurity (employee healthcare platform), Zolvit (tax and compliance support for MSMEs), and MSMEx (advisory platform for MSMEs) so far and will add more partners in the near future, Shah said.

Parent Godrej Industries has already infused Rs 1500 crore into the company so far and is likely to infuse another Rs 1200 crore this fiscal which will keep Godrej Capital’s capital adequacy above 20%, Shah said. The company has turned profitable at the end of March 2023, Shah said without giving the numbers.

“We plan to increase our total loan book to Rs 35,000 crore in five years led by loans to MSMES. There is enough demand in the market for us to increase both our home loan as well as MSME business,” Shah said. The company’s home loan ticket size is Rs 45 lakh while loan against property ticket size is Rs 1.5 crore.

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