Cholamandalam Finance raises INR 4 billion

Cholamandalam Finance fund raising news

Cholamandalam Finance has raised INR 4 billionTier-II debt from CDC Group through 10-year Rupee Denominated Masala Bonds.

Cholamandalam Investment and Finance Company has raised INR 4 billion ($57 million) from CDC Group Plc (“CDC”), the United Kingdom’s Development Finance Institution and impact investor through the issuance of unsecured, subordinated, Rupee Denominated Masala Bonds.

This is CIFCL’s maiden Masala Bond issue which may be listed on London Stock Exchange or any other international stock exchanges in future.

CIFCL caters to small and medium road transport operators for new and used commercial vehicles with over 50% of the portfolio in low income states. The majority of CIFCL’s customer segment is self-employed borrowers/entrepreneurs and small manufacturers, with nearly one-third of the portfolio constituting first time borrowers, thereby facilitating access to the formal capital market and promoting financial inclusion.

Arun Alagappan, Managing Director of CIFCL, said “CDC’s investment in CIFCL’s Masala Bonds will support the extension of loans todriver-turned-owners and micro and small enterprises in underserved rural and semi-urban areas of India. We look forward to working with CDC in promoting the economic and social well-being of our customers.”

Srini Nagarajan, CDC’s Managing Director and Head of Asia, said “Our investment will enable CIFCL to extend loans to small vehicle owners and facilitate availability of credit to rural and semi-urban markets and support the Company with subordinated-debt in this tight liquidity environment”.

CIFCL has over 1,000 branches across India offering vehicle finance, business and home loans, with a diversified loan portfolio spanning 1.2 million customers.