Godrej Group Launches Housing Finance Arm, Home Loans To Start At 6.69%
Godrej Group has forayed into the financial services industry by launching its housing finance arm.
The Indian conglomerate said that Godrej Housing Finance would offer home loans at interest rates starting from 6.69% and aims to build a balance sheet of Rs 10,000 crore in three years.
The lender in a statement said it will initially offer home loans in Mumbai, Delhi-NCR, Pune and Bengaluru and will also partner with developers, including Godrej Properties Ltd. The group also clarified that the housing lender and its real estate arm will have no links in terms of the company structure.
“It’s currently a private company directly held by the Godrej family and the team who has come on board,” Pirojsha Godrej, chairman of Godrej Housing Finance, said at a video conference on Tuesday.
The initial equity for the business will be put in by Godrej Group, Pirojsha Godrej said, adding that he expects it to range between Rs 1,000 crore and Rs 1,500 crore in the first three years. “Equity requirements beyond that we will evaluate at the subsequent stage.”
“We believe that the housing finance market is underpenetrated and underserved," said Manish Shah, managing director and chief executive officer of Godrej Housing Finance. “The industry is also plagued with being complex and convoluted with hidden conditions and painfully long customer journeys,” he said. “We aim to usher a transparent way of doing business”.
Shah said the company is aiming for a balance sheet size of Rs 32,000-35,000 crore over 7-8 years.
The mortgage lender, according to a statement, intends to offer loans against property in the near future, followed by business and personal loans, leveraging the group’s consumer and agri-business ecosystems. The company said it’s not focusing on lending to developers.