Cholamandalam Investment Raises Rs 502 Crore Through NCDs
By Ankur Chandra | Updated at: Jun 4, 2025 05:01 PM IST
Mumbai, June 4, 2025: Cholamandalam Investment and Finance Company Ltd (NSE: CHOLAFIN), a Murugappa Group enterprise, has successfully raised ₹502 crore through the private placement of Unsecured Subordinated Non-Convertible Debentures (NCDs). This issuance is part of a broader ₹1,000 crore debt program, inclusive of a ₹500 crore green shoe option, and has been listed on the National Stock Exchange’s Wholesale Debt Market (WDM) segment.
On June 3, 2025, CHOLAFIN shares closed at ₹1,566.30. However, on June 4, 2025, the stock opened at ₹1,554.70 and experienced a decline of approximately 3.22%, settling at ₹1,515.80 (11.17 am) by mid-morning trading. This dip is attributed to broader market volatility and profit-booking activities following the recent NCD announcement.
Key Details of the Issue
| Particulars | Details |
|---|---|
| Type of Security | Unsecured Subordinated Non-Convertible Debentures |
| Mode of Issuance | Private Placement via NSE EBP |
| Number of Securities | 50,200 |
| Amount Allotted | ₹502 crore |
| Total Issue Size | ₹1,000 crore (including ₹500 crore green shoe option) |
| Listing | NSE – WDM Segment |
| Tenure | 7 years |
| Coupon Rate | 8.57% |
| Coupon Frequency | Annual (every June 3rd) and on maturity date (June 3, 2032) |
| Security | Unsecured |
| Payment Default Clause | No default or delay reported |
Strategic Implications
The successful allotment underscores strong institutional investor confidence in Cholamandalam Investment’s financial health and growth prospects. The 8.57% coupon rate over a 7-year tenure offers a competitive return in the current interest rate environment, aligning with the company’s long-term funding strategy.
Proceeds from this issue are expected to bolster Chola’s expanding portfolios in vehicle finance, home loans, SME lending, and secured business loans, which have demonstrated consistent growth in recent quarters. As India’s NBFC sector experiences a rebound and credit demand escalates, this capital infusion positions Chola to effectively leverage emerging market opportunities.
Compliance & Governance
Cholamandalam Investment has affirmed full compliance with Regulations 30 and 30(A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company reported:
- No defaults in interest or principal payments
- No pending letters or adverse comments related to securities or associated assets
This adherence reinforces Chola’s reputation for robust governance, timely disclosures, and disciplined credit practices, essential for sustaining investor trust.
Strategic Capital Raise Triggers Mixed Market Response
The announcement of the ₹502 crore NCD allotment signaled a strategic move by Chola to strengthen its capital base. While the capital raise is a positive indicator of the company’s growth trajectory, the immediate market reaction was a slight dip in stock price, influenced by short-term profit-booking and overall market sentiment.
Looking Ahead
With ₹502 crore secured and an additional ₹498 crore available under the green shoe option, Cholamandalam Investment is strategically positioned to:
- Enhance asset-liability management (ALM)
- Mitigate short-term refinancing risks
- Diversify its funding sources beyond traditional avenues
Given its consistent performance, prudent risk management, and backing from the Murugappa Group, Chola maintains a favorable credit profile, enabling access to funds at competitive rates despite a fluctuating interest rate environment.
Company Overview
Headquartered in Chennai, Cholamandalam Investment and Finance Company Ltd is a leading diversified non-banking finance company (NBFC) offering a range of financial products and services, including:
- Vehicle Finance
- Home Loans
- Loan Against Property
- SME Loans
- Consumer & Secured Business Finance
Supported by the Murugappa Group, one of India’s oldest and most respected business conglomerates, Chola has consistently demonstrated the ability to grow its portfolio while maintaining asset quality and operational efficiency.
REF:https://nsearchives.nseindia.com/corporate/JashJS_03062025184408_NSEIntimationSEBIReg30AllotmentSD77.pdf
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