Cholamandalam Investment decides to halt gold loan lending

Its gold loan disbursed, outstanding stands at Rs 19 cr that constitutes less than 1% of net managed assets

The Murugappa Group's NBFC arm Cholamandalam Investment and Finance Company has decided to withdraw gold loan offering. It may be noted the company started gold loan in fiscal 2012 as a pilot project.

Considering the turbulence and the several regulatory changes witnessed in the gold loan business, the company decided to withdraw gold loan offering, M B N Rao, chairman of the company told the shareholders at the AGM today.

Company's gold loan disbursed and outstanding stood at Rs 19 crore which constituted less than 1% of the net managed assets.



Rao said, the company realigned its corporate finance business and reduced its finance against shares portfolio in line with its revised focus and strategy in this business.

 

  The corporate finance business ended the year with an asset float (net) of Rs 258 crore which constitutes less than one% of the net managed assets.

During the fiscal, the company added new line of offerings, said Rao. These includes home loans, rural financing syndication and MSME loans on a pilot basis.

While home loan business will focus on new home loans for the self employed segment, rural financing business will focus on arranging loans to the farmer community.

MSME business will offer bill discounting, working capital demand loans, bridge loans, pre-shipment credit and term loans to MSMEs.

The company raised equity capital of Rs 300 crore through QIP route. The company also raised Rs 698 crore through perpetual debt and subordinated debt instruments to meet the CAR to meet the business volumes, said Rao.