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Cholamandalam Investment to set up a housing finance company as an unit

The company is looking at raising around Rs 3,500 cr through masala bonds

BS Reporter  |  Chennai 

Cholamandalam Investment and Finance Company

Investment and Company Ltd has said that it is planning to launch a Company (HFC) and to raise around Rs 3,500 crore ($500 million) by issuing 3,500 masala bonds in one or more tranches.

The bonds will be issued in the nature of secured redeemable, non-convertible debentures of a face value of Rs 1 crore each.

The company, in a regulatory filing today said that the Board of Directors has considered and approved "setting up of a Company (HFC) as a subsidiary and approved necessary authorisations to make an application to National Housing Board and do the needful in this connection".

The Corporation (IFC) has recently said that it would invest around $75 million in first rupee-denominated offshore bond (Masala bond) of Investment and Company Limited (CIFCL), part of the Chennai-based Murugappa Group.

The issuance with IFC's support will open an entirely new funding source (foreign investors) for the company, which it can tap into to further its diversification plans, according to IFC's disclosure.

The proceeds of this investment will be used to extend loans to small road transport operators, most of whom are first-time borrowers or driver-turned-owners and SMEs (small and medium enterprises) in LIS, it said in an earlier announcement.

First Published: Wed, December 20 2017. 20:19 IST