Godrej Industries Ltd (GIL) has increased its stake in its subsidiary Godrej Capital Limited (GCL) to 91.11%, following a rights issue by GCL. The holding was previously 90.89%, and GIL acquired 22,107 fully paid-up equity shares of ₹10 each, resulting in a primary capital infusion of ₹409 crore. This move strengthens GIL’s control over GCL and underscores its commitment to supporting its financial services subsidiaries.
Strategic Significance of the Investment
Godrej Capital serves as a core investment company, holding stakes in Godrej Housing Finance Ltd and Godrej Finance Ltd. By increasing its shareholding, GIL ensures greater influence in GCL’s strategic decisions, aligning with its broader growth objectives in the financial services sector. The transaction was carried out at arm’s length and remains within the investment limits approved by GIL’s shareholders under Section 186 of the Companies Act, 2013.
Since becoming a subsidiary of GIL on March 25, 2021, GCL has exhibited steady growth, both in capital and operational scale. The recent rights issue facilitates capital mobilization for its ongoing and future financial initiatives.
Financial Performance of GCL and GIL
GCL has shown robust performance over the last three fiscal years. Its consolidated income stood at ₹1,620.20 crore for FY25, up from ₹889.14 crore in FY24 and ₹346.91 crore in FY23, reflecting strong growth momentum across its portfolio. The paid-up share capital of GCL currently totals ₹42.78 lakh.
Meanwhile, Godrej Industries reported strong Q1FY26 results. Consolidated net profit rose 8.2% year-on-year to ₹349 crore, compared to ₹322.5 crore in the corresponding quarter of the previous year. Revenue from operations increased 5% to ₹4,459 crore, while EBITDA surged 18% to ₹395.5 crore, with operating margins improving to 8.9% from 7.9%, driven by efficient operations across its diverse business segments.
Outlook and Implications
The capital infusion into GCL not only reinforces GIL’s strategic hold on its subsidiary but also equips GCL with the financial flexibility to expand its lending and investment activities. This step is expected to enhance operational synergies across the Godrej financial services ecosystem, including Godrej Housing Finance and Godrej Finance, positioning the group for sustained growth in India’s evolving financial sector.
Summary:
Godrej Industries has increased its stake in Godrej Capital to 91.11%, investing ₹409 crore via a rights issue. GCL, holding key stakes in Godrej Housing Finance and Godrej Finance, has shown strong growth with consolidated income reaching ₹1,620.20 crore in FY25. The move strengthens GIL’s control and supports the expansion of its financial services business, complementing robust Q1FY26 results with 8.2% profit growth and improved operational margins.
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