Godrej Industries rolls out plans for the NBFC business

By Nitin Jain
April 11, 2022
3 Comments

Godrej Industries (GIL) has communicated the following –

GCL, the financial subsidiary of GIL was started in 2020 and since then has been providing home loans in select geographies. It is the holding entity for Godrej Housing Finance (an HFC) and Godrej Finance Limited (an NBFC).
It is currently present across Mumbai, Bengaluru, Delhi NCR, Ahmedabad, and Pune and will soon be operational in six new cities, i.e., Jaipur, Chandigarh, Hyderabad, Chennai, Indore and Surat.
The Company aims to build a Balance sheet size of Rs 30,000 crore by 2026.
GIL has committed to invest Rs 1,500 crore of equity and expects a total equity requirement of Rs 5,000 crore by 2026 to achieve the targeted scale of business.

Given Godrej’s reliable track record in building new businesses, I would be watching developments in this space closely. The finance business also has synergies with the group’s other ventures including real estate and consumer durables.

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Godrej Industries

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Nitin Jain

2 years ago

So far, both the businesses (NBFC & HFC) are close to achieving a balance sheet of Rs 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.
Going forward, the housing finance business and the NBFC will scale up home loans with major developers and diversify into affordable housing.

Author

Nitin Jain

1 year ago

There are further updates from Manish Shah, CEO, Godrej Capital

FY 23 is expected to end with assets under management of Rs 6,000 cr. This is targeted to reach to Rs 30,000 crore by FY 26.

Loan to small businesses (primarily LAP) contribute 25% of the total book. Target is to take it to 60% by FY 26.
Besides LAP, company will launch unsecured business loans as well as supply-chain finance product over the next few months
Currently LAP’s average ticket size is Rs 1.5 crore. Planned unsecured business loans will be in the range of Rs 10-25 lakh and will be of shorter tenure compared to LAPs

Other than business loans; balance are primarily home loans
Most of these are in the range of Rs 40-lakh to 1crore
Customer base is white-collared salaried professionals

Manish mentioned that home loans is a low-risk, low reward product and their plan was always to focus more on higher yielding small businesses, while keeping risk under control.

Author

Nitin Jain

1 year ago

Further updates from Manish.

FY 23 end book is estimated at Rs 5,500 cr

Rs 4,000 cr housing loan book. Housing loan ticket size is Rs 45 lakh and Loan Against property ticket size is Rs 1.5 cr.
Rs 1,500 cr MSME customers

FY 24 target is Rs 12,000 cr book

Rs 7,000 cr housing loan
Rs 5,000 cr MSME. Target is to increase number of MSME customers to 10,000 from 1,000 currently

5 yr target is to increase loan book to Rs 35,000 cr

Godrej Capital has launched the digital platform Nirmaan to provide a bouquet of services to MSMEs

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.
The partnerships will help increase the potential market reach of small businesses, simplify legal and compliance for them, enhance their employees’ health and welfare, and provide business coaching to them, the company said.
Platform seems to be targeted towards creating a funnel for the MSME customers

Godrej Industries will infuse further Rs 1,200 crore in the current FY 24 for Godrej Capital’s growth. It has so far infused Rs 1,500 cr.

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