Cholamandalam Investment raises Rs 400 cr from CDC Group via masala bonds

Diversified financial services company Cholamandalam Investment and Finance Company Ltd (CIFCL) on Friday said it has raised 57 million Canadian dollars (Rs 400 crore) through its maiden rupee denominated masala bonds for on lending.

It raised the money from CDC Group Plc, the UK's development finance institution and impact investor, a release said.

"CDC's investment in CIFCL's masala bonds will support the extension of loans to driver-turned-owners and micro and small enterprises in underserved rural and semi-urban areas of the country," CIFCL Managing Director Arun Alagappan said.

The financial services arm of the Murugappa Group caters to small and medium road transport operators for new and used commercial vehicles with over 50 per cent of the portfolio in low income states.

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