The transaction marks Godrej Capital’s first strategic acquisition and expands its presence beyond MSME lending and housing finance into the secured retail lending segment.
The acquired business includes assets under management (AUM) of around ₹280 crore, nearly 12,000 customers, 54 branches across Andhra Pradesh, and about 250 employees, the company said in a statement.
Godrej Capital said the acquisition will strengthen its retail lending business as it looks to diversify its loan portfolio. The company has set a target of building a ₹1 lakh crore AUM financial services franchise by 2031.
“The acquisition of Kanakadurga Finance’s Gold Loan business marks an important milestone in Godrej Capital’s journey and represents our first strategic acquisition,” Managing Director and CEO Manish Shah said.
Kanakadurga Finance said the transaction aligns with its strategy to sharpen focus on its vehicle finance business.
The acquisition comes at a time when India’s gold loan market is witnessing strong growth, driven by a sharp rise in gold prices and increasing demand for secured credit. The segment has also attracted renewed interest from banks and non-banking financial companies (NBFCs), prompting several players to expand through branch additions, product launches and acquisitions.
According to Reserve Bank of India data, outstanding loans against gold jewellery stood at ₹3.29 lakh crore at the end of May 2026, up 69.9% from ₹1.94 lakh crore a year earlier.
The heightened activity has also led to consolidation in the sector. Earlier this month, Tata Capital acquired a majority stake in Kerala-based Yogakshemam Loans (Yogloans), marking its entry into the gold loan business.
Yogloans is a Reserve Bank of India (RBI)-registered non-banking financial company (NBFC) focused primarily on gold loans.
Under the proposed all-cash transaction, Tata Capital acquired around 88.6% of Yogloans’ issued and paid-up share capital (on a fully diluted basis) through a combination of a capital infusion and purchase of shares from existing shareholders.
The deal was based on a pre-money equity valuation of up to ₹318 crore, subject to customary adjustments. It also included a primary capital infusion of around ₹93 crore to support Yogloans’ future growth plans.