Mumbai: India’s Godrej conglomerate is looking to make acquisitions in big emerging markets including China, South Africa and Brazil, and expects affordable housing in India to be a key driver of its real estate business.
Adi Godrej, who is chairman of the Godrej group of companies, said the group’s property business, a unit of Godrej Industries that plans an IPO, is likely to account for about 30% of group profit in two to three years, from about 10% now.
“The real estate market in India is the largest market we play in for any of our business. We believe the demand especially for affordable housing is huge. We expect real estate to grow faster than any of our other businesses,” he told Reuters Television in an interview at his office in central Mumbai.
Godrej Properties, which has vast land holdings in Mumbai, has tapped investment banks Kotak Mahindra and ICICI Securities to underwrite an initial public offering of a 10% stake in the next three months, Godrej said last week.
Godrej Consumer Products Ltd would consider raising debt or selling equity to institutional investors to fund acquisitions in the hair care and personal care products segments, the chairman said.
“Godrej Consumer Products is looking for more acquisitions in developing countries with large populations, like China, South Africa and Brazil,” he said.
Last year, Godrej bought the South African hair care brand “Kinky”.
The Godrej group has yearly sales of about $2.2 billion and generates about 25% of its business overseas, a share that the third-generation patriarch of the family business expects to maintain.
The Godrej group’s businesses include hair care products, chicken processing, pest control, palm oil, furniture and real estate.
Godrej said the group intends to maintain growth at about 20 to 22% a year, with organic growth accounting for about three-quarters of that expansion and acquisitions driving the remainder.