NEW DELHI: Godrej Capital, a subsidiary of Godrej Industries, is steering clear of the consumer finance business, choosing instead to focus on small business loans and the housing finance sector.
The company, which ventured into the credit business in November 2020, currently has an asset size of Rs 13,000 crore. Of this, Rs 8,000 crore comes from small business loans, while Rs 5,000 crore is from the housing finance business.
“There’s nothing wrong with some of these other businesses (consumer finance business), we just haven’t found enough opportunity for us to go in, and we don’t see what we call our right to win in some of these places,” said Manish Shah, Managing Director and CEO of Godrej Capital.
One of the reasons cited by Shah for avoiding the consumption finance business is the overbuild in some areas of credit around consumer finance.
The company is preparing to enter the affordable home loan business by the end of this calendar year.
Godrej Capital has set a target of achieving Rs 50,000 crore in assets by March 2028, with an immediate goal of reaching a Rs 17,000 crore loan portfolio by the end of the current financial year and Rs 30,000 crore by March 2026. In the medium term, the company aims to have one-third of its loan portfolio in housing finance and the remaining two-thirds in small business loans.
The company also plans to pursue an Initial Public Offering (IPO) once it reaches Rs 50,000 crore in assets under management (AUM).
“These businesses are capital-intensive, and it is only logical to be looking to list. Our plan has been by the end of phase one, which is somewhere between April 2027 and March 2028,” Shah said when asked about its IPO plans.
However, the company has not yet decided whether it will list the holding company, Godrej Capital, or one of the two loan businesses – housing finance or small business loans.