Godrej Capital expects AUM to increase by 69% to Rs 30,000 crore by FY26

Godrej Capital, the financial services arm of Godrej Group, expects its assets under management (AUM) to increase by 69 per cent to Rs 30,000 crore by FY26, up from Rs 7,700 crore in FY23, driven by an expansion and growth in micro, small and medium enterprises (MSME) lending, a senior company executive said on Thursday.

The company has mainly two lines of business – out of which the housing sector contributed around Rs 4,000 crore to the AUM last financial year, while the MSME sector contributed around Rs 3,700 crore. "By the end of this financial year, we expect our AUM to touch Rs 12,000 crore and by FY26 it may reach Rs 30,000 crore. Our home loans division has its presence in five cities now, while the MSME division has its presence in 30 cities. We are planning an expansion to 60 cities in the next 18 months," said Manish Shah, managing director and chief executive officer at Godrej Capital. It is also expecting the overall MSME loan portfolio to touch Rs 6,000 crore by the end of this financial year, out of which Rs 1,000 crore will be unsecured business loans.

Godrej Capital recently launched unsecured business loans explicitly tailored for MSMEs and aims to tap 10 per cent of the market share in Tamil Nadu across MSME lending, the company said. The company has expanded its operations in the state by opening new branches in Kanchipuram, Salem, and Coimbatore, in addition to its existing presence in Chennai.

The company has partnered with over 150 channel partners across Tamil Nadu to provide various product offerings across MSMEs.

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It added that Tamil Nadu remains an essential market for Godrej Capital as private lenders account for over Rs 700 crore per month across secured and unsecured loans for MSMEs. The company aims to scale up the unsecured business and enhance its loan against property (LAP) business for a broader customer segment and range of collaterals.

"Chennai has been a critical contributor to our MSME lending business, and we are optimistic about expanding to new cities. With innovative and flexible offerings like Design your EMI, Bizrewards, longer tenures, and higher loan amounts, we remain focused on providing small business owners with the right financing to grow their businesses. Further, Godrej Capital Nirmaan will help small businesses with the right tools and resources beyond lending for comprehensive growth," Shah added.

With a network of over 2,500 channel partners and over 300 developers, Godrej Capital serves over 11,000 customers across products. It is looking to expand the distribution network to over 10,000 partners over the next two years.

Godrej Capital recently launched a new digital platform, Nirmaan, to provide MSME owners an all-inclusive opportunity to grow 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 employee health and welfare, and provide business coaching for small businesses.