Cholamandalam Investment and Finance Company Ltd is planning to raise around Rs 300 crore through private placement, including by a Qualified Institutions Placement. The proposed fund raising is to increase tier I capital capital to meet the proposed Regulatory requirement.
In an announcement to BSE the company said that the Board of Directors of the Company at its meeting held on December 27, 2012 has approved raising capital up to Rs 300 crore by an issue of Securities in one or more tranches, through private placement.
Company source said that the fund raising would help the company’s future growth and also to meet if Usha Thorat’s Committee recommendation comes into effect.
It may be noted, Director of Centre for Advanced Financial Research and Learning (CAFRAL) Usha Thorat led committee has recommended increasing the tier I capital of non-banking financial companies to 12% so as to reduce their risk to sensitive sectors.
CIFCL has reported a 75% growth in net profit during the second quarter ended September 30, 2012 at Rs 69.70 crore as against Rs 39.73 crore, a year ago. Selvan attributed the growth to growth in asset book in the last one year, high interest cost which was brought down and also less tax provision compared to last year.
Company's total income rose to Rs 605.12 crore from Rs.412.80 crore in second quarter of 2011-12 registering a growth of 47%. The growth was mainly due to vehicle finance, which rose by 41% to Rs 2,142 crore from Rs 1700 crore and growth in home equity to Rs 500 crore from Rs 342 crore. company's interest income was also high in the quarter, said company source.
