Godrej Housing Finance is planning to enter co-lending partnerships as part of its proposed foray into the affordable housing financing space, Manish Shah, Managing Director & CEO, Godrej Capital has said.

The housing finance arm of Godrej Capital has also commenced two small pilot projects on affordable housing in Mumbai and Pune, Shah told BusinessLine. 

Later this year, Godrej Capital will also launch cash flow based unsecured lending through its another subsidiary—Godrej Finance, he added. 

When asked about break even, Shah said Godrej Capital will look to break-even this fiscal—second full year of operations. 

Godrej Housing Finance and Godrej Finance are two operating entities that fold into Godrej Capital, which is the holding company. Godrej Housing Finance commenced operations in November 2020. 

On whether Godrej Housing Finance is planning to evolve as an affordable housing Finance player, Shah said: “We are very cognisant of the fact that as a market participant affordable housing is a good opportunity and an important one too. It is not only an opportunity financially, it is also need of the hour. The more we looked at affordable housing, the more we realised we have to understand it much better. There are players who understand it much better than us. So we are partnering on co-lending basis and on the other hand we are looking at our own pilots. This is a classroom journey for us in this space and we are in learning phase,” Shah added.

Godrej Capital, which currently has an assets under management of ₹2,500 crore, wants to build a retail asset franchise across the country. Godrej Industries, which is a listed entity, has infused ₹1,500 crore into Godrej Capital.

Godrej Housing Finance started operations in five cities —Mumbai, Delhi, Bengaluru, Ahmedabad and Pune and is now expanding to six more cities— Chennai, Hyderabad, Indore, Chandigarh, Surat and Jaipur. “We will be in 11 cities in next quarter,” Shah said. 

Going forward, the company will use the presence in these 11 cities to expand its base in the respective States.

From a product basket sense, it is into prime housing and loan against property segments.

₹30,000 crore AUM 

By April 2026, Godrej Capital is aiming for a balance sheet of ₹30,000 crore.

“Our first goal is to reach ₹6,000-crore by FY23; achieve ₹10,000 crore by the end of next fiscal and ₹30,000 crore by FY26,” Shah said. 

He further said that Godrej group will leverage its long standing relationships with banks to avail term-loans from banks to meet the debt requirements of the business. 

“As we speak today, we would have 2X of our current AUM as committed credit lines from banks. There is enough debt runway for our financial services business given that other group companies are not large borrowers,” Shah said adding that Godrej Capital would ride on innovations around product design (design your EMI) and product delivery to differentiate itself from other players. 

Hardening interest rates 

On rising interest rates, Shah said: “Hardening of interest rates is here to stay. We don’t see demand falling off as rates rise. I am encouraged that it will not take demand down. In fact, we are seeing a strong consumer demand,” Shah said. 

Shah highlighted that home affordability in India had been the best in last two decades. “Overwhelming majority of our customers were buying to live in them,” he added.

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