Godrej Capital Enters Gold Loan Business With ₹117.5 Crore Acquisition Of Kanakadurga Finance

Godrej Capital, the financial services arm of the Godrej Group, has entered the gold loan segment through its subsidiary Godrej Finance, acquiring the gold loan business of Vijayawada-based Kanakadurga Finance for ₹117.5 crore.

The announcement was made on 22 July and represents Godrej Capital's first strategic acquisition since its establishment. The deal adds approximately ₹280 crore in assets under management (AUM), nearly 12,000 customers and 54 operational branches across Andhra Pradesh to Godrej Capital's portfolio, along with an experienced team of around 250 employees.

Why Gold Loans And Why Now

The gold loan segment has been one of the fastest-growing areas of consumer lending in India. Gold jewellery loans increased to ₹3.29 lakh crore at the end of May 2026, a jump of 69.9% from ₹1.94 lakh crore a year ago. The combination of rising gold prices and the secured nature of the product has made it more and more attractive to lenders, leading to a wave of new entrants and acquisitions.

Tata Capital made a similar move on 13 July, acquiring a majority stake in Kerala-based Yogakshemam Loans (Yogloans) to enter the gold loan business.

For Godrej Capital, the acquisition fits into a broader ambition to build a more diversified lending institution. The company currently focuses on MSME lending and housing finance and has been building out a consumer finance platform. Adding gold loans gives it a third retail lending vertical with significant growth potential, particularly as formalisation of credit accelerates and demand for organised lenders rises.

The Bigger Picture

Godrej Capital's managing director said the acquisition is the first step in executing a longer-term inorganic growth strategy as the company works towards ₹1 lakh crore in AUM and more than one million customers by 2031.

The company is currently targeting AUM of ₹38,000 crore by the end of FY27 and has plans to go public within the next five years. Kanakadurga Finance's promoters said the decision to transition the gold loan business to Godrej Finance allows them to concentrate on their core vehicle finance operations.

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