Cholamandalam Investment to seek shareholders’ nod to nearly double borrowing powers to Rs 2 lakh cr

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Cholamandalam Investment and Finance Company Limited (CIFCL) plans to seek shareholder approval to significantly increase its lending from Rs. 1.10 lakh crore now to Rs.2 crore to support the growing volume of operations expected in the coming years.

The enabling special resolution, allowing for an 82 percent increase in borrowing, will be conveyed at the 45th annual meeting of the Cairo International Business and Financial Market (AGM) on August 1, 2023.

Specifically, the non-banking finance company will seek the approval of the shareholders to authorize the Board of Directors to borrow in excess of the total paid-up capital and free reserves up to an amount not exceeding ₹ 2 crore and create charge, lien, lien, lien, lien on the assets/properties of the company .

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“In view of the increasing volume of operations planned in the coming years, it is necessary to increase the borrowing limits of the company to ₹ 2 lakh crores,” according to CIFCL’s annual report.

At the AGM held in July 2022, the members (by special resolution) gave their consent to the Board of Directors to borrow more than the total paid-up capital, free reserves to a maximum of 1.10 lakh crore.

NBFC, part of the Murugappa Group, offers Vehicle Finance (VF), Mortgage Loans (HL), Loan Against Property (LAP), SME Loans, Business and Personal Secured Loans (SBPL), Consumer and Small Business Loans (CSEL) , among other things, to customers.

Also read: Cholamandalam Investment Q4 net profit jumps 24% to Rs 853 crore

“The company will look to expand through new product segments (CSEL, SME and SBPL), as well as improve efficiencies in existing segments (VF, LAP and HL).

“The company’s strong sales and group collections, along with digital initiatives and branch access, will also support in improving efficiencies,” the report said.

CIFL’s assets under management increased by 36% YoY to Rs.1,12,782 crore at the end of March 2023, compared to Rs.82,904 at the end of March 2022. Net profit increased by 24% YoY to Rs.2,666 crore in the financial year 23, as against ₹2,147 crore in FY22.