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The company will raise the money by issuing 50,000,000 Compulsorily Convertible Preference Shares (CCPS) of Rs 100 each aggregating to Rs 500 crore on a preferential basis as permitted by SEBI (ICDR) Regulations to investors as a preferential issue in terms of Chapter VII of the SEBI (ICDR) Regulations.
This capital infusion will help the Company to meet the business growth and augment the Tier 1 capital adequacy ratio (CAR).
The CCPS will bear a dividend coupon of one per cent per annum payable from the date of allotment of CCPS till the date of conversion into equity shares. The CCPS shall be converted into equity shares at the expiry of 12 months from the date of allotment or earlier at the discretion of the Board.
The entire CCPS issue will be subscribed by funds advised by the global private equity firm Apax Partners (Apax Funds). The proposed preferential issue is subject to the approval of the members of the Company and any other applicable regulatory approvals.
Commenting on the occasion, S Vellayan, Managing Director of Cholamandalam said "We are glad to have the opportunity to work with Apax a leading global PE firm in this round of capital infusion"
Commenting on the occasion, Shashank Singh, Managing Director and Head of Apax's India office said, " we believe in the long term secular growth runway of Indian retail financial services and Cholamandalam is well positioned in this space, with the good management team and exposure to attractive lending segments. Axis Capital Limited was the exclusive transaction advisor to Cholamandalam for this fund rise.
The M&A advisor to Apax Funds was Kotak Mahindra Capital Company. Khaitan & Co and Kirkland & Ellis LLP were legal counsel for Apax Funds on this transaction.
