Godrej Capital has entered the gold loan business with its first-ever acquisition, marking a major step in expanding its financial services portfolio.

The company has acquired the gold loan business of Kanakadurga Finance through its subsidiary, Godrej Finance, as it looks to strengthen its position in consumer lending and accelerate its long-term growth plans.

Highlights:

• Godrej Capital has entered the gold loan business by acquiring Kanakadurga Finance's Rs 280 crore loan portfolio and 54 branches.
• The acquisition supports the company's plan to build a Rs 1 lakh crore AUM business and expand its consumer lending presence by 2031.

The acquisition gives Godrej Capital immediate access to an established gold loan business with around Rs 280 crore in assets under management (AUM), nearly 12,000 customers, 54 branches across Andhra Pradesh, and a team of around 250 employees.

While the company has not disclosed the deal value, the move significantly expands its presence in one of India's fastest-growing lending segments.

How is this acquisition going to benefit?

Gold loans have emerged as one of the fastest-growing lending categories in India over the past year. Rising gold prices have increased the value of pledged jewellery, making it easier for borrowers to access larger loans. At the same time, lenders prefer gold loans because they are secured against physical assets, reducing credit risk.

According to industry data, outstanding loans against gold jewellery reached Rs 3.29 lakh crore at the end of May 2026. This represents a sharp 69.9% increase from RS 1.94 lakh crore a year earlier, highlighting the strong demand for this financing option.

Godrej Capital currently focuses on MSME lending, housing finance and consumer finance. By adding gold loans to its portfolio, the company aims to build a more diversified lending business while serving a wider range of retail customers.

Godrej Capital, Managing Director and CEO Manish Shah said, “The acquisition is an important milestone, it supports the company's strategy to build a stronger and more diversified financial services franchise over the next five years.”

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A growing market attracts more financial players

Godrej Capital's move reflects a broader trend across India's financial sector. Several banks and non-banking finance companies are expanding into gold loans as demand continues to rise.

Earlier this month, Tata Capital also entered the segment after acquiring a majority stake in Kerala-based Yogakshemam Loans. The growing competition shows that financial institutions see gold-backed lending as a stable business with long-term growth potential.

The acquisition also fits into Godrej Capital's broader expansion strategy. In June, the company launched its wealth management business and announced plans to build a Rs 1 lakh crore AUM platform over the next five years. It initially plans to offer wealth management services in eight cities before expanding to 35 locations over the next three years.

Last month, the company also said it aims to increase its AUM to Rs 38,000 crore by the end of the current financial year and is working towards a potential public listing within the next five years.

The addition of Kanakadurga Finance's gold loan portfolio gives Godrej Capital an established customer base, operational network and experienced workforce from day one. Instead of building the business from scratch, the acquisition allows the company to scale quickly in a market where demand continues to grow.

This latest acquisition positions the company to compete more effectively while supporting its long-term goal of becoming a leading diversified financial services provider in India.