SNG & Partners Guides Kanakadurga Finance in Godrej Finance Gold Loan Business Acquisition

In a significant development within the financial services sector, Godrej Finance Limited has successfully acquired the gold loan business of Kanakadurga Finance Limited. The acquisition involves a substantial gold loan portfolio valued at approximately ₹280 crore in assets under management. This expansive portfolio serves nearly 12,000 customers through 54 operational branches located across Andhra Pradesh and includes around 250 employees.

SNG & Partners provided comprehensive legal counsel to Kanakadurga Finance and its promoters throughout this transaction. The firm’s advisory encompassed all aspects of the deal, including ensuring seamless continuity of loan servicing for active portfolios, facilitating the transition of branch networks and employees, and managing the transfer and custody of customer and collateral records. This also involved overseeing the migration of data, technology, and third-party arrangements, all within the framework of a Reserve Bank of India (RBI)-regulated, customer-facing lending business.

The transaction was spearheaded by Aditya Vikram Dua, Partner and Head of Financial Services at SNG & Partners, along with Sagar Devgan, Associate Partner. The deal team also received strategic insights from Devyani Dhawan, Counsel, and was supported by Eesha Govilla, Senior Associate, and Arjun Khanna, Associate.

This acquisition not only marks Godrej Finance’s foray into the gold loan sector but also signifies a strategic milestone for Kanakadurga Finance. The move allows Kanakadurga Finance to capitalize on the value of its gold loan portfolio while ensuring continuity and stability for its customers, employees, and branch network across Andhra Pradesh.

In a related development earlier this month, Tata Capital also made its entry into the gold loan market by acquiring YOG LOANS. This trend indicates a growing interest and competitive dynamics within the gold loan industry.