“I plan to list Godrej Capital in the next five to six years” | Jobs Recent


MUMBAI : Godrej Capital, which will house the group’s non-banking arm and housing finance, has announced a series of moves to become a world-class retail financial services company and build Balance sheet of 30,000 kroner by 2026. GIL will invest 5,000 crores in Godrej Capital over the next four years. In an interview, Pirojsha Godrej, chairman, and Manish Shah, CEO, Godrej Capital, said that although the group is a late entrant, it sees significant growth opportunities. Adapted excerpts:

Godrej is the latest Indian industrial house to enter financial services. Will the group apply for a banking license?

Godrej: I do not think so. Let’s see how the regulatory environment is doing in this regard. Although there is still some convergence in favor of the bank, the advantages of NBFCs are significant. We entered this business with the assumption that a banking license was not an option. If it becomes an option at some stage, we will assess the pros and cons. We believe this is a huge opportunity in the current format. We are quite late to the industry. This provides its own advantages. The market is big enough and growing and we don’t think it will be difficult for us to establish scale and more scale. It is more important for us to work in the right way, identify the risks and take the right steps.

What are the capital raising plans for GCL?

Godrej: By the end of April, Godrej industries would invest 1,500 crore in the financial services venture. This should be sufficient for growth this year and next year. To get to 30,000 crore of assets under management in three to four years, will be the total capital required 5000 crowns. We expect the rest 3,500 crore will come from Godrej Industries. The financial services industry will need a lot of capital to grow more. We will aim to bring GCL to the public within four to six years.

What is the ownership structure of GCL?

Godrej: Godrej Capital is a subsidiary of Godrej industries. The top team that has come on board has some ownership stake in the business. The exact business of sharing depends on their performance. It is mostly a wholly owned subsidiary. Under Godrej Capital are Godrej Housing Finance and Godrej Finance. GHFL will focus on home loans, loans against property and unsecured loans. Godrej Capital each has a 100% stake in both companies. This will be our financial services entity and as and when we enter new products or business lines we may have separate operating entities.

Are you looking for other businesses like insurance and mutual funds?

Godrej: We’re not right now. We will keep our eyes and ears open. Once we achieve initial success, we could venture into other financial services.

To increase your balance sheet 30,000 crore by 2026, will you want to grow both organically and inorganically?

Chess: We operate in one or two business lines in five cities; this year we will go to six other cities. Next year we will look at the next set of geographies. Two, it’s a business line. We started with prime apartments and LAP. Later this year, we will launch in a sandbox fashion with affordable housing and cash flow loans. Inorganic will be more of a co-borrowing and co-creating partnership.

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