Godrej Capital expects its lending businesses to maintain strong growth and is targeting an AUM of around Rs 40,000 crore by the end of the current financial year, Manish Shah, MD and CEO of Godrej Capital, said.
The company started the year with around Rs 27,000 crore of AUM across its lending businesses and expects to grow the book by nearly 50% during the year. Its overall AUM currently stands at about Rs 32,000 crore.
“We are quite bullish across the board,” Shah said, citing continued growth in secured and unsecured business lending, affordable housing, gold loans and supply-chain finance.
Godrej Capital operates through Godrej Finance, its NBFC arm, and Godrej Housing Finance. It has more than 150 branches and expects the network to reach around 250 by the end of the year following its acquisition of a gold-loan business in Andhra Pradesh.
Affordable housing will remain a key area of expansion. While the housing business currently has a presence primarily in Hyderabad, the gold-loan acquisition is expected to provide a granular distribution network across Andhra Pradesh. Godrej Capital plans to use this network to expand its affordable housing business in the state.
Gold loans are emerging as a new growth engine for Godrej Finance. The company currently has around Rs 250 crore of gold-loan assets but expects the business to reach Rs 10,000 crore over the next five to six years.
The acquired gold-loan business is being integrated under the Godrej Finance brand, with plans to launch gold loans in Gujarat and Maharashtra as well.
Shah said the expansion of gold loans should be seen in the context of the formalisation of borrowing rather than simply as a rise in household leverage. A significant portion of gold-backed borrowing was earlier sourced from informal lenders at substantially higher interest rates, he said.
The company is also closely monitoring the end-use of loans, particularly consumption-led borrowing. Every loan has an end-use statement, while customers are assessed for their ability to service the debt, Shah said.
Godrej Capital does not plan to aggressively pursue mass-market unsecured personal lending. Instead, it intends to gradually enter the segment by leveraging its existing customer base and cross-selling products where it has sufficient information to assess borrowers.
The company is also using artificial intelligence to improve customer service and credit underwriting. AI tools are being used to analyse customer calls at scale, identify service gaps and automate routine interactions. In underwriting, AI is helping process bank statements, identify unusual transaction patterns and flag potential irregularities for human underwriters.
Shah said AI is not being used to replace human decision-making but to allow employees to focus on higher-value tasks. While productivity gains are expected to increase as these systems scale, the company does not yet see a dramatic impact on financial performance.
Godrej Capital is also building a wealth management and asset management business. Godrej Wealth Management, launched in June, is currently expanding beyond its initial markets.
The company has set a target of Rs 1 lakh crore of assets under management and advisory across its wealth and asset management businesses by 2032.
Its wealth platform follows an open-architecture model, distributing products of other asset managers. The group also has a PMS licence and has launched its first private credit fund under its AIF platform.