Godrej Capital enters gold loans with Kanakadurga Finance business acquisition

MUMBAI: Godrej Capital is striking while the gold is hot. The financial services arm of the Godrej Group has entered the fast-growing gold loan market by acquiring the gold loan business of Kanakadurga Finance through its subsidiary, Godrej Finance, for an undisclosed amount.

The transaction marks Godrej Capital’s first acquisition since its inception and forms part of its strategy to build a more diversified lending franchise as it expands beyond MSME lending and housing finance.

With the acquisition, Godrej Capital adds a gold loan portfolio of around Rs 280 crore in assets under management (AUM), nearly 12,000 customers, 54 operational branches across Andhra Pradesh and a team of about 250 employees.

The company said the deal supports its long-term ambition of building a Rs 1 lakh crore AUM franchise and serving more than one million customers by 2031.

In a statement, Godrej Capital, managing director and chief executive officer, Manish Shah said, “The acquisition of Kanakadurga Finance’s gold loan business marks an important milestone in Godrej Capital’s journey and represents our first strategic acquisition as we continue building a larger and more diversified financial services franchise with a five-year ambition of achieving Rs 1 lakh crore AUM.”

Godrej Capital said it has spent the past five years strengthening its technology, risk management capabilities and customer-centric operations. The acquisition is expected to broaden its lending portfolio while accelerating growth in consumer finance.

The move comes as gold loans emerge as one of the fastest-growing retail lending segments in India, driven by record gold prices and the secured nature of the product. According to official data, outstanding loans against gold jewellery reached Rs 3.29 lakh crore at the end of May 2026, a rise of 69.9 per cent from Rs 1.94 lakh crore a year earlier.

The rapid growth has intensified competition among financial institutions. Earlier this month, Tata Capital entered the segment by acquiring a majority stake in Kerala-based Yogakshemam Loans, signalling growing interest in gold-backed lending among large financial services players.

Godrej Capital has been steadily broadening its financial services portfolio. In June, it launched its wealth management business with plans to build a Rs 1 lakh crore wealth platform over the next five years. The business will initially operate across eight cities before expanding to 35 locations over the next three years.

The company is also pursuing aggressive growth across its lending businesses. Last month, Shah told PTI that Godrej Capital aims to grow its AUM to Rs 38,000 crore by the end of the current financial year and is targeting a public listing within the next five years.

With its first acquisition now complete, Godrej Capital has added another pillar to its financial services portfolio, positioning itself to capitalise on India’s booming secured lending market while advancing its long-term scale ambitions.