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IFC commits $50m to India's Cholamandalam NBFC

  • Andrew Woodman
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International Finance Corporation (IFC), the investment arm of World Bank, is investing INR3.15 billion ($50.7 million) in non-banking finance company (NBFC) Cholamandalam Investment & Finance (CIF).

According to a release, IFC will subcribe to tier two debt in the form of unsecured non-convertible debentures (NCDs) issued by the Bombay Stock Exchange-listed company. The investment will help CIF scale up its operations in several low-income states and reduce reliance on bank borrowings.

Headquartered in Chennai, CIF is the financial services arm of the Murugappa Group and counts Norwest Venture Partners, Creador Capital, Multiples Alternate Asset Management, Amansa Capital and Aquarius Investments among its other investors. The promoters hold a 57.8% stake.

The business primarily focuses in the rural and semi-urban sector. It has more than 500 branches in 22 Indian states, including nine low-income states. It has a loan portfolio of around INR220 billion. Its core business segments include vehicle finance, home equity loans, corporate finance, stock broking and distribution of financial products.

CIF aims to increase its customer base by 400,000 over the next few years.

The deal comes shortly after IFC said it would lend around $91 million to PE-backed NBFCs Magma Fincorp, Bandhan Financial Services and Au Financiers.

 

 

 

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