Cholamandalam to venture into gold and agri-loan segments

 | December 11,2010 12:46 pm IST

Non banking finance company (NBFC) Cholamandalam Investment & Finance Company Ltd (Chola Finance) is mulling the launch of gold loans, asset-based agriculture lending and funding of sub-contractors in the infrastructure space next fiscal, a top company official said.


"We are looking at launching new products like gold loans, asset based loans for the agriculture sector and also sub-contractors involved in the infrastructure space.

For the current fiscal we will be continuing with our existing line of products - vehicle (old and new), corporate finance and home equity," Managing Director Vellayan Subbiah told reporters here Friday.


Queried whether the $3.03 billion revenue Murugappa group would venture into banking sector to expand its financial services business, A. Vellayan, chairman, said: "The norms are not clear. We haven't closed the door to banking, on the other hand the authorities have to open the door."


According to him, the company is focusing to become a predominant player in vehicle finance.


The group's Director (Finance) N. Srinivasan, replying in the negative when asked about the possibility of the group floating a specialised NBFC for funding infrastructure projects, added: "We are looking at 25 percent growth for Chola Finance."


He said: "Chola Finance operates out of over 200 branches across the country and with the group's non-life insurance business - Cholamandalam MS General Insurance Company (Chola MS) there is an opportunity to cross sell."


Currently, Chola Finance has over Rs.9,100 crore as asset under management.


Ruling out any need for raising finance in the near future, Subbiah said the company's capital adequacy ratio is comfortable for the business targeted by the company.


On securitisation of the company's loans, he said: "We have securitised around Rs.1,000 crore worth of loans. Going forward the option of raising finance through this route depends on the interest rates."


According to Srinivasan, the company's total borrowing is around Rs.6,000 crore and most of it is from banks and the balance from money market instruments and others.


Speaking about Cholamandalam, MS General Insurance Company Ltd's Managing Director S.S. Gopalratnam said the company is hoping to post a top line of around Rs.1,000 crore and a before tax profit of Rs.24 crore.


"We plan to reduce the combined ratio (ratio of expenses and losses to the premium earned) by five percent to 100 percent in two years time. With a combined ratio of 105 percent we are the third best in the Indian non life sector," he said.


On Friday, the Murugappa group announced the rebranding of its financial services business after the exit of Singapore based DBS from its NBFC this year.


The group's financial services business comprises of Chola Finance, Cholamandalam Securities Ltd, Cholamandalam Distribution Services Ltd, Cholamandalam MS General Insurance and Cholamandalam MS Risk Services Ltd.







Post new comment

The content of this field is kept private and will not be shown publicly.
This question is for testing whether you are a human visitor and to prevent automated spam submissions. is not responsible for the views and opinions of the posters.
3 + 9 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.


Nithya on 12/27/11 at 12:45 pm

i have 3 yrs experience in gold loan is there any vacancy in your reputed concern

rajendiran on 12/27/11 at 12:48 pm

I have 4 yrs experience in gold loan . do have any vacancies in gold loan sector for coimbatore region.

Guest on 02/12/12 at 02:08 pm

I have 1 yrs experience in gold loan . do have any vacancies in gold loan sector for coimbatore region.