Godrej to invest up to ₹1500 crore in housing finance business

The new entity Godrej Housing Finance (GHF) plans to infuse around ₹1000-1,500 crore over the next 3-4 years and subsequently borrow at competitive rates, Pirojsha Godrej, chairman of Godrej Properties and Godrej Housing Finance said.

GHF has launched home loans at a low rate of 6.69% as introductory pricing, and will offer fast and flexible home loans, and commence operations starting with Mumbai, Bengaluru, Pune and Delhi-National Capital Region.

With GHF, Godrej Group has ventured into the financial services business space.

“…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," said Pirojsha Godrej, chairman, Godrej Housing Finance.

Godrej said the aim is to build a long-term, retail financial services business that is scalable.

For now, GHF will be offering loans to buyers in projects of group firm Godrej Properties Ltd and then expand to other projects as well.

Manish Shah, managing director and CEO, Godrej Housing Finance said the industry is 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," 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 residential real estate, around 18 out of the 94 housing finance companies have de-grown, while the top give have grown sharply.

Godrej said for the first 1-2 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, it 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.