Godrej to invest ₹1,500 cr in new home finance unit2 min read . Updated: 11 Nov 2020, 07:28 AM IST
- The company aims to build a loan book of ₹10,000 cr within the next three years
Godrej Group has launched its housing finance business and aims to build a loan book of ₹10,000 crore, with a customer base of 40,000 within the next three years.
The new entity, Godrej Housing Finance (GHF), plans to infuse ₹1,000-1,500 crore in the next three-four years and, subsequently, borrow at competitive rates, said Pirojsha Godrej, chairman, Godrej Properties and GHF.
The company will extend home loans at 6.69% as an introductory offer, besides providing flexible options and faster processing time of loan applications. It will start operations in Mumbai, Bengaluru, Pune and Delhi-NCR.
With GHF, Godrej Group has ventured into the financial services business space.
“The increasing formalization 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 moment," said Pirojsha Godrej.
“We hope to deliver value to the Indian homebuyer with a deep focus on fair, fast and flexible home loans," he said, adding that the aim is to build a long-term, scalable retail financial services business.
For now, GHF will offer loans to Godrej Properties Ltd customers and then expand to projects by other developers as well.
Manish Shah, managing director and chief executive officer, Godrej Housing Finance, said the industry is plagued with instances of complex and convoluted 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 customized to what’s important to them, basis their housing needs, financial capability and convenience," Shah added.
While GHF will look at a loan size of ₹50 lakh, it will finance homes in the ₹30 lakh to ₹1.5 crore and above category, with a focus on metros and the mass-affluent category.
Given the ongoing liquidity crisis in the non-banking financial services (NBFC) sector, coupled with the slowdown in the residential real estate market, business activity of 18 out of the 94 housing finance companies have been muted, while the top five have grown sharply.
Godrej said for the first one-two years, the company will look at organic growth and, after that, it may look at inorganic opportunities for growth as well.
GHF plans to focus on the mortgage business starting with home loans, followed by loans against property.
Going forward, the company will also expand its product portfolio to offer business and personal loans, leveraging the group’s consumer and agri-business ecosystems to build these verticals.