Godrej Capital, the financial services arm of the Godrej Group, is looking at a loan book of Rs 12,000 crore this fiscal, up from Rs 5,500 crore in the just-concluded fiscal.
The company, among the youngest NBFCs, began operations only in late 2020 as a housing finance firm, primarily to serve the group's realty arm and then launched an NBFC vertical focused on SMEs and MSMEs.
Of the total loan book of Rs 5,500 crore, Rs 4,000 crore is in the home loan vertical, of which more than 50 per cent are Godrej Properties customers, and the rest is the small businesses among 1,000 MSME customers.
Managing director and chief executive Manish Shah on Monday said the company has zero bad loans across the two verticals, and the MSME book has also turned profitable in the March quarter, while the home loan arm has been profitable for the whole of last fiscal.
He also said the promoters will be infusing Rs 1,200 crore capital this fiscal and the first tranche will come this quarter itself. When they launched the holding company, the Godrej group had infused Rs 1,500 crore in equity capital.
"We closed FY23 with a loan book of Rs 5,500 crore. We plan to grow this to Rs 12,000 crore this fiscal. Of this, over Rs 7,000 crore should come in from the MSME/SME vertical as we plan to treble our presence this year. The rest of the disbursals should be in the home loan vertical," Shah told reporters
The company also plans to grow its MSME customer base ten times to 10,000 this fiscal and the geographical reach by almost three times.
"The management had set a target of crossing the Rs 10,000-crore loan book by the third year of the operations, which I am very confident of achieving this year by a wide margin," Shah said.
Over the next three years, he is expecting the MSME/SME book to grow to Rs 30,000 crore and the total loan book to touch Rs 50,000 crore by FY29, when they may also look at taking the company public. But that is not a mandate per se, he added.
As part of the aggressive growth target, Shah announced the launch of Nirman, a specially curated digital platform to provide MSMEs/SMEs with an opportunity to scale up their businesses.
The company has initially partnered with Amazon Global Selling, Onsurity, Zolvit, and MSMEx to help increase the potential market reach, simplify legal and compliance, enhance employees' health and welfare, and provide business coaching for small businesses.
Shah said this is not aimed at commercial benefits in the short to medium term, and small businesses can avail of the services free of cost. By availing of their platform, a company can save up to Rs 10,000 in six months as a registration fee on Amazon.
"While we are happy to welcome them as our customers, there is no compulsion to borrow from us to use our platform. While we may not be incurring actual cash payouts, we can make a bargain with these platforms so as to give them free service or lower their fees as our Nirman platform over time can get them larger business," Shah said. The MSMEs in the country today face challenges like limited access to the market and ability to expand beyond their regional reach; lack of know-how about legal and regulatory compliance requirements; limited access to technology, hiring and retaining a skilled workforce; and limitation of access to credit, the company said in a statement.
The platform aims to solve these challenges and provide services under the categories of Grow the Business, Ease Business Operations and Transformation through upskilling.
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