Chola mulls listing of all its debentures

Non-banking financial major Cholamandalam Investment and Finance Company Ltd (CIFCL), part of the Rs 4,200 crore Chennai-based Murugappa Group is looking at a listing of all its debentures.

The NBFC is also planning to enter into securitisation deals worth Rs 200 crore in the next fiscal.

Forty per cent of CIFCL's debenture offerings worth about Rs 250 crore are already listed and the company has close to Rs 350 crore of unlisted debentures in its books. 

"We are looking at the option of going in for listing all our debentures. Prior to the Securities and Exchange Board of India guidelines we had already close to 40 per cent of our debentures. The idea was to create liquidity and now we are mulling the option of extending the same to all the unlisted debentures also," M Anandan, managing director, CIFCL told Business Standard.

"It is a far more efficient manner," Anandan said referring to the listing of debentures. CIFCL which had entered into a securitisation deal worth Rs 50 crore worth Rs 50 crore two weeks back with Citigroup, expects to mop up close to Rs 200 crore in the next financial year, through the same route.

"We have a good track record and even for the most recent securitisation deal ICICI and HDFC competed along with Citigroup. The deal securitisation deal was a mix of our commercial vehicles and cars portfolio," Anandan said.

CIFCL would be mopping up close to Rs 500 crore for meeting its funding requirements next year, Anandan said. "It would be through a mix of debt, securitisation, deposits and a rights issue," he said.

CIFCL, Anandan said would be targeting a balance sheet growth of 25 per cent per annum on a base of Rs 1,600 crore.

In line with its vision of wanting to become a pan-India player CIFCL is also slated to start focussing on its brand new operations in the Eastern region.

"We are moving in a systematic manner to expand our presence. Next year we will be activating our eastern region and will be operating out of Kolkata. The whole idea being able to cross sell and up sell across categories of our financial offerings to customers," Anandan said.

1:2 rights issue

The board of directors of CIFCL approved a 1:2 rights issue. The rights issue will be issued at a premium of Rs 45. The company expects to mop up a minimum of Rs 70 crore through the rights issue.

Earlier today the shareholders of the company approved the increase in authorised capital of the company from Rs 70 crore to Rs 160 crore. The enhanced authorised capital will consist of Rs 100 crore in equity capital and Rs 60 crore of preference capital.

"As a NBFC w have to maintain a capital adequacy ratio of 12 per cent. We are proactively strengthening the capital base to support the future growth of the company. The capital adequacy ratio is in the region of 13.5 per cent now and we expect it to be around 14.5 per cent next year," Anandan said.

"A strong capital base will also enable the company to raise more debt funds at lower costs," he said.