Godrej Ind To Enter Pvt Credit Space, Aims To Raise ₹2,000 Cr In AIF

Godrej Industries Group (GIG) on Tuesday announced an entry into the private credit space, targeting to raise up to ₹2,000 crore in maiden alternate investment fund (AIF).

In an announcement that comes days after Pirojsha Godrej from the next generation of the business family took over mantle as the chairperson of the grouping, GIG said the Godrej Asset Management Company (AMC) will be raising the money in the category-II AIF.

The AIF will be a sector-agnostic platform serving established private mid-market companies with a performing credit strategy, an official statement said, adding that financing will be backed by hard collateral and comprehensive covenant protection.

It is targeting to raise a minimum of ₹1,000 crore and the overall target corpus is ₹2,000 crore, along with a greenshoe option, the statement said.

The money will be raised from eligible investors, including high net worth individuals (HNIs), ultra high net worth individuals (UHNIs), family offices and institutional investors, it said.

It can be noted that GIG is already present in the lending and wealth management space through its subsidiary Godrej Capital.

The private credit space, which involves lending typically at higher interest rates to entities with peculiar situation where the regulated bank or non-bank finance is not possible, has been growing in India over the last few years.

Godrej Capital Managing Director and Chief Executive Manish Shah, who is also a Non-Executive Director of Godrej AMC, termed the foray into private credit as a "natural extension" for the business and the company now intends to build its capabilities in the asset management business.

"Many well-run mid-sized businesses need capital that offers greater flexibility than conventional financing, without requiring them to dilute equity. We see an opportunity to address that need by combining our understanding of Indian businesses with disciplined capital," Shah said.

Pavan Manchala, the chief investment officer for private credit, said, "enduring outcomes" in the business come from identifying resilient businesses, structuring capital thoughtfully, and maintaining underwriting discipline.

The business will focus on capital preservation and seek to deliver attractive risk-adjusted returns, the statement said.