Godrej to enter non-bank lending business

Bombay : The 124-year-old Godrej Group is set to enter the non-bank lending business with its Godrej Finance Ltd unit, a person familiar with the matter said. The $4.1 billion conglomerate is expected to make an official announcement in this regard on Monday, the person said on condition of anonymity.

Godrej Finance had held a Non-Banking Financial Company (NBFC) license since 1998, when it was known as Ensemble Holdings and Finance; however, he was never active in the loan space.

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The lender, which will have an authorized share capital of 1,000 crore, will start with small business non-mortgage loans and property loans, the person said. It could later enter consumer lending, a space now dominated by Bajaj Finance Ltd.

According to Arvind Singhal, president of Technopak Advisors, the financing activity will grow for all entities as the economy develops. “Godrej is present in housing finance. It is also present in consumer products, household appliances and furniture. Given the funding opportunities, the group has the capacity to build up a good portfolio. The Godrej brand is synonymous with trust and respect, which will also help them grow in the financial services industry,” Singhal said.

In October 2020, the group launched Godrej Housing Finance Ltd, which offers mortgage loans from 40,000,000 1 crore, but only for customers of Godrej Properties Ltd. Its capital adequacy ratio stood at 21.8% in March 2021 and had a loan portfolio of 1001 crores in December 2021.

An email sent to a spokesperson for Godrej Housing Finance went unanswered.

In July 2021, following an approval from the Reserve Bank of India, the group holding company Godrej Industries Ltd transferred its stakes in its units Godrej Housing Finance and Godrej Finance to Godrej Capital (another subsidiary previously called Pyxis Holdings ), which makes it the financial holding company of the group.

According to data from the Ministry of Corporate Affairs, Godrej Finance has been engaged in investments and other activities of NBFC. Investment activities include trading in listed and unlisted securities and owning 0.6% of Godrej Properties, he said.

Godrej Industries had signaled its ambition in the field of finance even last year. “The company plans to expand and diversify its business activities. He believes that there is great potential for housing finance and non-bank finance business in our country with a decent return on investment. The housing finance business in India has been growing at a steady pace. GHFL recently obtained a license to operate as a housing finance company and commenced operations. Looking at the opportunity in the housing finance sector and the activities of the NBFC, it is proposed to develop the financial activity under the umbrella of the company, being the flagship company of the group,” he wrote. at the stock exchanges on August 24.

The Godrej Group was founded in 1897 when brothers Ardeshir and Pirojsha Godrej opened a lock manufacturing business in Mumbai after failing in earlier ventures. It has since grown into a global conglomerate.

The group experienced an ownership shake-up after a family feud erupted between the two brothers, resulting in the division of the group’s business among the next generation of the family.

The group is led by veteran industrialist Adi Godrej (79) as chairman. His brother Nadir Godrej is chairman of Godrej Industries and Godrej Agrovet. Their cousin Jamshyd N. Godrej is chairman of Godrej & Boyce Manufacturing Co. Ltd, whose assets include largely undeveloped land in Mumbai.

Adi’s son, Pirojsha, runs Godrej Properties, which is developing some of the land owned by Godrej & Boyce, as well as other projects in Mumbai. Adi’s youngest daughter, Nisaba, is President and Managing Director of Godrej Consumer Products Ltd. Adi’s other daughter, Tanya, is the executive director and chief brand officer of Godrej Industries.

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