Cholamandalam Investment NCD opens for subscription on 28 July 2023. the company aims for a base issue size of ₹500 Crores.
About the company
Incorporated in 1978, Cholamandalam Investment and Finance Company (CIFCL) is the financial services arm of Chennai-based Murugappa Group. The company operates primarily in the commercial vehicle financing and loan against property segments. In FY15, CIFCL ventured into the small and medium enterprise loan and housing finance business. The company offers loans for commercial vehicles, passenger vehicles, 2-wheelers, tractors, construction equipment, homes, SMEs, and others.
CIFCL has an established position in the vehicle finance market backed by its strong franchisee base and fairly diverse product portfolio. As of December 2022, it had 1,166 branches in India. About 80% of CIFCL’s branches are in rural areas. The company has a diversified network with no single region (North/South/East/West) accounting for more than 30% of the total branches as of December 2022.
The AUM grew by 31% YoY in 9M FY2023 compared to 10% YoY in FY2022 and the compound annual growth rate (CAGR) was 20% between March 2017 and March 2021. The AUM stood at INR 95,468 crores in December 2022 with vehicle finance, home equity, home finance, and new businesses accounting for 64%, 21%, 8%, and 7%, respectively.
Objectives of the Issue
- Onward lending, financing, and repayment of interest and principal of existing borrowings of the company.
- General corporate purposes.
Cholamandalam Investment NCD Details
| Issue Open | Jul 28, 2023 – Aug 3, 2023 |
| Security Name | Cholamandalam Investment and Finance Company Limited |
| Security Type | Secured, Redeemable, Non-Convertible Debentures (Secured NCDs) |
| Issue Size (Base) | ₹ 500 Crores |
| Issue Size (Shelf) | ₹ 5,000 Crores |
| Issue Price | ₹ 1000 per NCD |
| Face Value | ₹ 1000 each NCD |
| Minimum Lot size | 10 NCD |
| Market Lot | 1 NCD |
| Listing At | BSE, NSE |
| Credit Rating | ICRA AA+ (Stable) by ICRA Limited and IND AA+ (Stable) by India Ratings & Research Private Limited |
| Tenor | 22, 37 and 60 months |
| Series | Series I to VI |
| Payment Frequency | Annually and Cumulative |
| Basis of Allotment | First Come First Serve Basis |
| Debenture Trustee/s | IDBI Trusteeship Services Ltd. |
Options and Coupon Rates
| Option | Tenure | Interest Payment | Coupon Rate | Effective Yield | Maturity Amount |
| Series 1 | 22 Months | Annual | 8.25% | 8.26% | ₹ 1,000 |
| Series 2 | 22 Months | Cumulative | NA | 8.25% | ₹ 1,156.64 |
| Series 3 | 37 Months | Annual | 8.3% | 8.30% | ₹ 1,000 |
| Series 4 | 37 Months | Cumulative | NA | 8.30% | ₹ 1,279.15 |
| Series 5 | 60 Months | Annual | 8.4% | 8.39% | ₹ 1,000 |
| Series 6 | 60 Months | Cumulative | NA | 8.40% | ₹ 1,497.41 |
Cholamandalam Investment NCD Rating
The company has received a rating of ICRA AA+ (Stable) by ICRA Limited and IND AA+ (Stable) by India Ratings & Research Private Limited for the NCDs proposed to be issued pursuant to this Issue.
Company Financials
| Period Ended | 31 Mar 2020 | 31 Mar 2021 | 31 Mar 2022 |
| Assets | 64,058.38 | 74,644.16 | 82,478.68 |
| Revenue | 8,712.63 | 9,639.72 | 10,231.81 |
| Profit After Tax | 1,053.72 | 1,521.39 | 2,158.89 |
NCD Allocation Ratio
NCDs Offered by Category
| Category | NCD’s Reserved |
|---|---|
| Institutional | 1,500,000 |
| Non-Institutional | 1,250,000 |
| HNI | 1,250,000 |
| Retail | 1,000,000 |
| Total NCD’s | 5,000,000 |
Company Promoters
Cholamandalam Financial Holdings Limited, Ambadi Investments Limited, M V Subbiah, M A Alagappan, A Vellayan, A Venkatachalam, M M Murugappan, M M Venkatachalam, M A M Arunachalam, S Vellayan, Arun Alagappan, M M Veerappan, V Narayanan, V Arunachalam, M M Muthiah, M V Muthiah, Arun Venkatachalam, M V Subramanian, M V Murugappan HUF, M V Subbiah HUF, M A Alagappan HUF, A Vellayan HUF, A Venkatachalam HUF, M M Murugappan HUF, M A M Arunachalam HUF, M M Venkatachalam HUF, M M Muthiah HUF, A M M Arunachalam HUF, Murugappa & Sons (M V Subbiah, M A Alagappan & M M Murugappan hold shares on behalf of the firm) Tube Investments of India Limited New Ambadi Estates Private Limited, Coromandel International Limited, Ambadi Enterprises Limited, Carborundum Universal Limited, E.I.D. Parry (India) Limited, and M A Alagappan (holds shares on behalf of Kadamane Estates)
NCD Lead Manager
A.K. CAPITAL SERVICES LIMITED
603, 6th Floor, Windsor Off CST Road,
Kalina Santacruz (East), Mumbai – 400 098 Maharashtra
Phone: +91 22 6754 6500
Email: chola.ncd2023@akgroup.co.in
Website: www.akgroup.co.in
NCD Registrar
KFIN TECHNOLOGIES LIMITED
Selenium Tower B Plot 31-32,
Gachibowli Financial District Nanakramguda Serilingampally,
Hyderabad Rangareddi – 500 032 Telangana, India
Phone: +91 40 6716 2222
Email: chola.ncdipo@kfintech. com
Website: www.kfintech.com
Company Contact Details
CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED
Dare House, No. 2, N.S.C. Bose Road,
Parrys, Chennai 600 001, Tamil Nadu, India
Phone: +91 44 4090 7172
Email: investors@chola.murugappa.com
Website: www.cholamandalam.com
Final Thoughts
Non-Convertible Debentures (NCD) are a better investment option for those who are looking for a diversified portfolio. investing in Cholamandalam Investment NCD is purely your personal choice. make a good study and analysis before you make the investment.
Happy Investing
