Godrej Industries Group (GIG) announced on Tuesday its entry into the private lending sector, planning to raise up to ₹200 billion through its first Alternative Investment Fund (AIF).
This announcement followed shortly after Pirodja Godrej, representing the next generation of the family business, assumed the position of group chairperson. According to an official statement, Godrej Asset Management Company (AMC) will raise funds under AIF Category II.
This fund will serve as a non-sector-specific platform designed to cater to established mid-market private companies using a secured lending strategy. It has been stated that the financing will be backed by hard collateral and comprehensive debt protection.
The minimum fundraising target is set at ₹100 billion, with the total target size of the fund reaching ₹200 billion, including a green shoe option. Funds will be raised from qualified investors such as High Net Worth Individuals (HNIs), Ultra High Net Worth Individuals (UHNIs), family offices, and institutional investors.
It is worth noting that GIG already has a presence in lending and wealth management through its subsidiary, Godrej Capital. The private lending market, which typically involves issuing loans at higher interest rates to entities in special situations where regulated banks or non-banking financial institutions cannot provide financing, is growing in India in recent years.
Manish Shah, Managing Director and CEO of Godrej Capital, and Non-Executive Director of Godrej AMC, described the move into private lending as a 'natural extension' for the business. The company now intends to develop its asset management competencies. Shah noted: 'Many well-managed mid-sized enterprises require capital that offers greater flexibility than traditional financing, without the need to dilute equity. We see an opportunity to meet this need by combining our understanding of Indian business with disciplined capital.'
Pavan Manchala, Director of Private Credit Investments, emphasized that 'long-term results' in business are achieved by identifying sustainable enterprises, having a well-structured capital base, and maintaining underwriting discipline. It is stated that the business will focus on capital preservation and aim to deliver attractive risk-adjusted returns.