Chola DBS lines up Rs 200cr capex

Cholamandalam DBS Finance Limited will undertake a capital infusion plan of Rs 200 crore by way of a rights issue to support its expansion plans. The plan was approved at the board meeting of the company.

The company's profit after tax rose only marginally to Rs 7 crore from Rs 6 crore last year.

This was largely the by-product of a huge interest outgo of Rs 119.55 core in the first nine months to December 31, 2006, with net profit dropping almost 50 per cent to Rs 15.5 crore from Rs 30 crore in December 2005.

However, for the quarter ended December 31, 2006, Cholamandalam recorded a growth of over 114 per cent in revenues over the corresponding period last year, at Rs 109.25 crore as against Rs 50.89 crore.

Retail disbursements during the third quarter was up 141 per cent at Rs 746 crore, compared with Rs 310 crore during the same period last year. The corporate finance float increased to Rs 700 crore from Rs 309 crore during the corresponding period last year.

Cholamandalam DBS launched its home equity loans business in October 2006 and is currently operational in Chennai, Bangalore, Hyderabad and Coimbatore.

It will offer the product across India in the next six months.