Cholamandalam Investment and Finance Company Limited, launched as the financial services arm of the Murugappa Group, has posted a growth of 31.2 per cent in net profit at Rs 148.03 crore during the quarter ended December 31, 2015 as compared to Rs 112.79 crore posted during the same quarter of previous fiscal year. The Board of Directors of the company has approved raising Rs 6,000 crore through Non-Convertible Debentures (NCD).
The total income from operations during the three months stood at Rs 1,060 crore as against Rs 970.29 crore during the corresponding quarter of previous fiscal year, an increase of 9.25 per cent.
The total Assets Under Management (AUM) of the company has crossed Rs 30,000 crore and the Net Income Margin has seen a growth of 17 per cent during the quarter, compared to the corresponding quarter of previous year, said the company.
"It has been a good quarter. Profit improvements has happened because of good book growth, better fee income on disbursement and cost of funds has been lower. We have kept the NPAs under control. All these contributed to the good numbers that we have been able to clock in," said D Arulselvan, CFO, Cholamandalam Investment and Finance Co Ltd. The cost of funds has come down considerably, which has helped the good results.
He added that while it has received approval to raise Rs 6,000 crore, the company would be raising funds as and when it requires.
Speaking about the setting up of the payment bank, he said that the company is in the process of appointing a consultant and is expected to be ready with the bank in 12-14 months.
The Board of Directors has approved a proposal to invest up to a sum not exceeding Rs 75 crore in equity shares of Cholamandalam Distribution Services Limited (CDSL), a 100 per cent subsidiary of the Company in one or more tranches as a long term investment, for the proposed Payment Bank.
With this investment, the total investment by the company in CDSL will be at Rs 117.40 crore.
The capital infusion is consequent to CDSL obtaining an 'in-principle' approval for Payments Bank license from RBI. As per RBI guidelines and the terms and conditions of 'in-principle' approval for conversion into a payments bank, CDSL shall maintain a minimum net worth of Rs 100 crore at all times.
In December 23, 2015, the Board also approved a proposal to invest upto a sum not exceeding Rs 8 crore in White Data Systems India Private Limited (White Data) towards acquiring controlling stake of 63 per cent and said that the latter is in the business of providing holistic freight data solutions. This investment is expected to leverage synergies for the Company and its customers, it added.
The company disbursed Rs 3245 crore in Vehicle Finance business as against Rs 2290 crore in the third quarter of last fiscal year. This was possible on account of strong growth in Heavy Commercial Vehicle Volumes, and also healthy growth in Used Vehicles, said the company. Home Equity disbursements grew by 17 per cent, from Rs 754 crore during the quarter ending December 31, 2014, to Rs 882 crore in the corresponding quarter of this fiscal year. The aggregate disbursements for the quarter were Rs 4,260 crore as against Rs 3082 crore during the thrid quarter this year, with a growth of 38 per cent.