IFC proposes $74m investment in India's Cholamandalam

IFC plans to invest in Cholamandalam’s first rupee-denominated offshore bond, according to a disclosure. The development finance institution (DFI) will serve as the anchor investor in the proposed placement of up to $200 million.

Cholamandalam is based in Chennai and mainly focuses on rural and low-income areas of India. It has branches in all of the country’s low-income states, providing vehicle finance, home equity loans, corporate finance and stockbroker services. Proceeds of the investment will be used to provide loans to small road transport operators and small and medium-sized enterprises.

Founded in 1978 as the financial services arm of the Murugappa Group, Cholamandalam had 709 branches as of March 2017, according to its most recent annual report. It disbursed INR186 billion in loans for the year ended March 2017, with total assets under management of INR370 billion. Revenue for the year came to INR46.6 billion, up from INR41.9 billion the previous year, while over the same period net profit grew from INR5.7 billion to INR7.2 billion.

Cholamandalam has several PE backers, including IFC, which holds a 1.9% stake; Norwest Venture Partners, Westbridge Capital and Cartica Capital are also shareholders. Previous investors include Creador and Apax Partners, which exited in 2016 and 2017 respectively.

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• Topics
• South Asia
• Financials
• Credit
• India
• NBFCs
• IFC
• Financial Services