Cholamandalam Investment to launch 3-year bond issue, sources in banking circles concur.
India-based Cholamandalam Investment and Finance Company (CHOLAFIN) plans to raise 10 billion rupees ($115.1 million) through the issuance of bonds maturing in three years. The bonds will carry an annual coupon of 8.20%, according to reports from multiple merchant bankers. The company has invited bids from bankers and investors for the issue, which will be open on Friday. The issue size includes a greenshoe option of 5 billion rupees.
This is not the only bond issuance being reported in India today. Other notable deals include a 10-year bond issuance from HDFC Life Insurance, which will have an 8.10% coupon and a 10 billion rupee ($115.1 million) size. Axis Max Life Insurance is also planning a 10-year bond issuance with a coupon rate to be determined and a size of 5 billion rupees. Additionally, Bank of Maharashtra is planning a 10-year bond issuance with a coupon rate to be determined and a size of 5 billion rupees.
The three-year bond from CHOLAFIN has been rated AA+ by Icra, India Ratings, while the HDFC Life Insurance and Axis Max Life Insurance have been rated AAA and AA+, respectively, by Icra. The Bank of Maharashtra’s bond has been rated AA+ by both Icra and Care. The listing of these bond issuances is expected to affect the Indian bond market, particularly with CHOLAFIN’s issue size being significant and worth around 10 billion rupees.
The National Consumer Disputes Redressal Commission (NCDRC) has ordered a re-examination of the petition filed by Cholamandalam Finance.
The National Consumer Disputes Redressal Commission (NCDRC) held that a consumer complaint cannot be dismissed solely on the ground of non-joinder of a party without whom an effective order cannot be passed. The case involved a loan taken by the complainant from Cholamandalam Investment & Finance Ltd. (Appellant) for a vehicle purchase. The finance company failed to issue a No Objection Certificate and adjust a payment of Rs.1 lakh made directly to the dealer. The complainant filed a complaint, which was upheld by the District Commission and State Commission. The finance company appealed to the NCDRC, citing non-joinder of the dealer as a necessary party. The NCDRC observed that the dealer was originally a party to the complaint and could be included as a Performa respondent. The commission held that the appeal should not be dismissed due to procedural technicality and allowed the revision petition, directing the State Commission to add the dealer as a Performa respondent. The case highlights the importance of fairness in consumer disputes and the need to consider the principles of natural justice.
The analyst advises purchasing CDSL and divesting shares in ACC, Cholamandalam Finance, and Dr. Lal, advocating for a strategic readjustment of the portfolio.
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Cholamandalam bucks the trend, reporting robust third-quarter disbursements amidst a slower-than-expected festive season.
Cholamandalam Financial Holdings, a non-banking finance company, has reported a significant increase in disbursements for the third quarter (Q3) of the current fiscal year, despite a slow down in festive season sales. The company disbursed Rs 2,301 crore in Q3, a 13% growth over the same period last year.
The company’s strong disbursements were driven by its exposure to the housing and commercial segments, which saw an increase in demand. The company’s disbursements in the housing segment were up 15% year-on-year (YoY), while commercial disbursements rose 11% YoY.
However, the company’s festive season sales, which include the wedding season, saw a decline of 5% YoY due to the pandemic-induced economic uncertainty. Despite this, the company is optimistic about its growth prospects, stating that it is well-positioned to benefit from the revival of the economy.
Cholamandalam’s Q3 results are a positive sign for the non-banking finance company, which has been struggling in recent years. The company’s strong disbursements and growth prospects are likely to boost investor confidence, but the company’s performance will still depend on various factors, including the pace of economic recovery and regulatory changes.
Cholamandalam Investment: Strong Q3 disbursements underscore resilience amidst subdued festive season sales.
Arul Selvan, Cholamandalam Investment, expects a better Q3 in terms of disbursements compared to last year. He notes that October saw a good surge in disbursements due to festivals, while November saw a slight drop, but expects a better December due to year-end discounts. He also expects a better Q3 overall.
Regarding growth, Selvan expects disbursements to accelerate in Q4, with AUM growth targeted at around 25%. He notes that vehicle finance, loan against property, and home loans will continue to show growth, while SME and unsecured lending may slow down.
Selvan also addresses concerns about the rural market, stating that M&HCVs are still slow, but there is traction in used segments and rural passenger cars. He expects the company to reach its targeted growth.
On net interest margins (NIMs), Selvan expects only marginal improvements due to CRR cuts, and targets NIMs to remain at similar levels. He also reaffirms the company’s AUM growth guidance of 25% to 28% for the second half of the year, which may be achieved on the lower end of the target.
Cholamandalam Investment & Finance Company has appointed Aman Sharma as President and Chief Processing Officer.
Cholamandalam Investment and Finance Company (Chola) has promoted Aman Sharma to the position of President & Chief Processing Officer. Sharma has been with Chola for over two decades, showcasing exceptional leadership and expertise in process optimization and operational excellence. He has held various senior roles, including Senior Vice President and Business Head for Commercial Vehicles & Construction Equipment, and Head of Product Development for commercial vehicles. His contributions have strengthened the company’s operational capabilities and enhanced customer experience.
In his new role, Sharma will oversee the Central Processing Unit, focus on efficient processing of financial products, and streamline operations to deliver value-driven solutions to customers. Chola, part of the Murugappa Group, is a leading financial services provider in India, offering various products such as vehicle finance, home loans, and SME loans. Sharma’s promotion reflects the company’s commitment to nurturing internal talent and aligning leadership with its long-term growth strategy. With this new role, Sharma is expected to contribute significantly to Chola’s mission of delivering best-in-class financial solutions, further solidifying its position in the competitive financial services market.