The company is targeting to achieve a portfolio of Rs 1,000 crore by end of the fiscal in March 2021, and touch Rs 10,000 crore in assets under management within three years of the launch by having 40,000 loan accounts
The Godrej Group has forayed into the financial services industry with Godrej Housing Finance (GHF) through which it hopes to build a long-term and sustainable retail financial services business in India, aiming for a balance sheet of Rs 10,000 crore in the next three years.
The firm has committed to infuse up to Rs 1,500 crore in capital in the mortgage finance company over the next three years, the company said.GHF will offer fair, fast, and flexible home loans across India starting with customers in Mumbai, NCR, Pune and Bengaluru. GHF will partner with developers including Godrej Properties, to build a financing experience for their existing and new customers.
GHF intends to focus on the mortgage business starting with home loans, followed shortly by loans against property. In the near future, the company will expand its product portfolio to offer business and personal loans, leveraging the group’s consumer and agri business ecosystems to build these verticals, the company said.
GHF will start by extending loans at 6.69 per cent, the lowest in the industry at present, and initially target customers buying apartments from the group's realty arm Godrej Properties (GPL).
“We believe we have gained good understanding about the real estate business and its intersection with finance and are entering the new business after a carefully thought strategy,” GHF's Chairman Pirojsha Godrej told reporters.
“We are excited to launch our financial services business today. This is the first step in what we hope will be another important pillar of growth for the Godrej Group. The increasing formalisation of the real estate sector combined with the dislocation in the residential real estate and housing finance markets makes this a particularly interesting opportunity at the current moment. We hope to deliver value to the Indian home buyer with a deep focus on fair, fast, and flexible home loans that delight our customers,” he said.
“The initial equity for the business will be put in by the Godrej Group. This is expected to be in the range of Rs 1,000 crore to Rs 1,500 crore in the first three years. Any equity requirements beyond this we will evaluate at the subsequent stage,” he said.
“We believe that the Housing Finance market is underpenetrated and underserved. The industry is also plagued with being complex and convoluted with hidden conditions and painfully long customer journeys. We aim to correct this and usher a refreshingly simple and transparent way of doing business. We want to give customers a home loan that is customised to what’s important to them, basis their housing needs, financial capability and convenience,” said Manish Shah, managing director and CEO, GHF.
Shah said the company was targeting to achieve a portfolio of Rs 1,000 crore by end of the fiscal in March 2021, and touch Rs 10,000 crore in assets under management within three years of the launch by having 40,000 loan accounts.The company may also consider getting an external investor on board after three years and an initial public offering in 6-7 years once the need for more capital arises.