Cholamandalam Investment and Finance Company Limited

 CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED (CIFCL)

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED

31^st DECEMBER 2020

Total AUM crossed the milestone of ₹ 75,000 Crs Up by 15% and

Net Income Margin for the quarter - ₹ 1,364 Cr up by 26%

PAT for the quarter - ₹ 409 Cr up by 5%

Key Financial results (Q3 FY21 & YTD Dec 2020):

·         Total AUM up at ₹ 75,813 Cr (Up by 15% YoY)

·         Net Income Margin at ₹ 1,364 Cr (Up 26% YoY) for Q3 FY21 and ₹ 3,602 Cr (Up 18% YoY) for YTD Dec 2020

·         PAT at ₹ 409 Cr (Up 5% YoY) for Q3 FY21 and ₹ 1,272 Cr (Up 26% YoY) for YTD

Dec 2020

The Board of Directors of CIFCL today approved the unaudited financial results for the quarter and nine months ended 31st December 2020.

 Highlights:     

Q3 and YTD December 2020 Performance:

Performance Highlights:

 

 

 

 

 

 Note: Loan Losses include additional COVID provisions of ₹ 216 Cr for the nine-month ended 31^st December 2020, and total COVID provisions as of Dec 20 is 750crs

·            Aggregate disbursements in Q3 FY 21 were at ₹ 7,926 Cr as against ₹ 7,475 in Q3 FY 20, with a growth of 6%.  Disbursements for YTD Dec 2020 were at ₹ 17,972 Cr as against ₹ 23,429 Cr in the previous year registering a decline of 23% Y-on Y.

 ·            Vehicle Finance (VF) business has clocked a volume of ₹ 6,084 Cr in Q3 FY 21 as against ₹ 5,949 in Q3 FY20, started registering growth of 2%.  Disbursements for YTD Dec 2020, were at ₹ 14,096 Cr as against ₹ 18,685 Cr in the previous year, reporting a decline of 25% Y-o-Y. 

 ·            Loan Against Property (LAP) business disbursed ₹ 1,265 Cr in Q3 FY 21, as against ₹ 908 Cr in Q3 FY 20, with a good growth rate of 39%. The Disbursements for YTD Dec 2020 was ₹ 2,436 Cr as against ₹ 3,073 Cr in the previous year, registering a decline of 21% YoY.

 ·            Home Loan (HL) business disbursed ₹ 434 Cr in Q3 FY 21, as against ₹ 400 Cr in Q3 FY 20 registering a growth of 8%. The Disbursements for the nine months ended Dec 2020 were at ₹ 1,004 Cr as against ₹ 1,234 Cr in the previous year, registering a decline of 32% YoY.

 ·            Assets under management as at end of Dec 2020, grew by 15% at ₹ 75,813 Cr as compared to ₹ 65,992 Cr as at end of Dec 2019.

 ·            Profits after Tax (PAT) for Q3 FY 21 were at ₹ 409 Cr compared to ₹ 389 Cr in Q3 FY 20, reporting a growth of 5%. PAT for the nine months ended 31^st December 2020, were at ₹ 1,272 Cr as against ₹1,010 Cr in the same period last year registering a growth of 26%.

 ·            PBT-ROA for Q3 FY 21 was at 3.1% as against 3.4% in previous year quarter, while for YTD Dec 2020 it was at 3.4%, which is at the same level of 3.4% for the nine months end Dec 2019.

 ·            ROE for the YTD Dec 2020 was at 19.2% as against 20.3% in previous year.

 ·            The Company continues to hold strong liquidity position with Rs. 6,228 Cr as cash balance as at end of Dec’20 (including Rs 1500 Cr invested in Gsec shown under investments, as it is held to maturity), with a total liquidity position of Rs.10,923 Cr (including undrawn sanctioned lines).  The ALM is comfortable with no negative cumulative mismatches across all time buckets.

Interim Dividend:

The Board of Directors of the Company declared an Interim dividend of 65% being ₹ 1.30 per share on the equity shares of the Company, for the year ending March 31, 2021                                                              

 

 

 

 

 

 

 

Hon’ble Supreme Court has directed that accounts which were not in NPA as of 31^st August 2020, shall not be declared as NPA till further orders. Accordingly, the Company has not classified any new accounts as NPA after 31^st August 2020. However, if the Company had classified new accounts as NPA, then the Gross Stage 3 and Net Stage 3 would have been 3.75% and 2.12% respectively.

Capital Adequacy:

The Capital Adequacy Ratio (CAR) of the company as on 31^st December2020, was at 19.25% as against the regulatory requirement of 15%.

 

CHOLA PARTNERS WITH MARUTI SUZUKI FOR

CHOLA PARTNERS WITH MARUTI SUZUKI FOR VEHICLE FINANCE

§  ‘Buy Now Pay Later’ to make car financing easier for customers

§  Allows flexibility to customers to pay EMIs after two months of availing the loan

With the aim to finance a new car purchase easy and affordable, Cholamandalam Investment & Finance Company Limited (CIFCL) today announced a partnership with Maruti Suzuki India Limited. The objective of this partnership is to provide customised auto retail financing solutions to retail buyers. The ‘Buy Now Pay Later’ offer is aimed to provide customers with easy financing options.

A two-month deferment of EMI will bring advantage to car customers who currently are under resource crunch amidst the COVID-19 pandemic.

Encouraging people to go for financing of a new vehicle, the ‘Buy Now Pay Later’ offer will allow customers to start paying the EMIs after 60 days of loan disbursement. This will make the process of car buying more convenient in these unprecedented times. With Maruti Suzuki’s vast network of 3,086 new car retail outlets across 1,964 cities and towns and CIFCL’s extensive branch presence across the country, the offer is expected to benefit many customers. The offer is available on select Maruti Suzuki models and will be applicable on loan disbursement till June 30, 2020.

Commenting on the partnership, Mr. Ravindra Kundu, Executive Director, Cholamandalam Investment & Finance Company Limited said, “With the lockdown ending soon but the COVID-19 scare still far from being gone, social distancing is bound to be the new normal for at least some time to come. In such a scenario, owning a vehicle is certainly one of the most practical options to move ahead. Given this backdrop, we are very excited to partner with Maruti Suzuki India Limited, a trusted and renowned brand in India. This partnership will give us a strong foot hold in the car financing space, with our 1094 branches spread across semi urban and rural markets. The synergies between the organizations are aimed towards singular focus to bring benefits to the customers. This ‘Buy Now, Pay Later’ offer will help customers in realizing their car dreams without postponing their purchase any further. This partnership is also in line with our continuous endeavour in enabling our customers to ‘Enter a Better Life’.”

Speaking on the customer-centric initiative, Mr. Shashank Srivastava, Executive Director (Marketing & Sales), Maruti Suzuki said, “Customers have always been at the heart of Maruti Suzuki’s efforts of making personal mobility accessible. The partnership with Cholamandalam Investment & Finance company Limited will boost convenience by offering customized retail financing to the customers. It is aimed to offer comfort to buyers who may have faced liquidity crunch during the Covid-19 lockdown.  I am sure that the “Buy-Now-Pay-Later Offer” will encourage customers towards car purchase without putting immediate extra pressure on their pockets.”

Cholamandalam Finance raises INR 4 billion Tier-II debt

Cholamandalam Finance raises INR 4 billion Tier-II debt from

CDC Group through

10-year Rupee Denominated Masala Bonds

               

Cholamandalam Investment and Finance Company Limited (“CIFCL”), one of India’s leading diversified financial services companies, has raised INR 4 billion (c.$57 million) from CDC Group Plc (“CDC”), the United Kingdom’s Development Finance Institution and impact investor through the issuance of unsecured, subordinated, Rupee Denominated Masala Bonds.

This is CIFCL’s maiden Masala Bond issue which may be listed on London Stock Exchange or any other international stock exchanges in future.

Incorporated in 1978, CIFCL offers vehicle finance, business and home loans. It has more than 1,000 branches across India, with a diversified loan portfolio spanning 1.2 million customers.

CIFCL caters to small and medium road transport operators for new and used commercial vehicles with over 50% of the portfolio in low income states. The majority of CIFCL’s customer segment is self-employed borrowers/entrepreneurs and small manufacturers, with nearly one-third of the portfolio constituting first time borrowers, thereby facilitating access to the formal capital market and promoting financial inclusion.

Mr. Arun Alagappan, Managing Director of CIFCL, said “CDC and CIFCL have joined hands to address the business credit requirements of small and medium road transport operators and MSME customers, thereby enabling them ‘Enter a better life’. CDC’s investment in CIFCL’s Masala Bonds will support the extension of loans to driver-turned-owners and micro and small enterprises in underserved rural and semi-urban areas of India. We look forward to working with CDC in promoting the economic and social well-being of our customers.”

Mr. Srini Nagarajan, CDC’s Managing Director and Head of Asia, said “CDC’s commitment to CIFCL demonstrates our value as a Development Financial Institution with long-term patient capital. Our investment will enable CIFCL to extend loans to small vehicle owners and facilitate availability of credit to rural and semi-urban markets and support the Company with subordinated-debt in this tight liquidity environment. CDC has been investing in India for over 30 years and we look forward to the start of a productive long-term relationship with CIFCL and the wider Murugappa Group.”

CDC supports businesses that can make goods and services more affordable and accessible for people in Africa and Asia who really need them. The investment will help generate self-employment opportunities for low to middle-income customers helping to meet the Sustainable Development Goal for decent work. CDC’s commitment to CIFCL contributes to meeting the UN’s Sustainable Development Goal for decent work and economic growth.

Chola Q2 Results 2019

CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED (CIFCL)

AUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED

30^th SEPTEMBER 2019

Total AUM crossed ₹ 64,000 Crs and Up 23%

Key Financial results (H1 FY 19-20):

Disbursements up at ₹ 15,954 Cr for the H1 FY 20 (Up 15% YoY).

Total Income up at ₹ 4,227 Cr for the H1 FY 20 (Up 29% YoY).

PBT up at ₹ 1,006 Cr for the H1 FY 20 (Up 12% YoY).

Total AUM up at ₹ 64,409 Cr (Up 23% YoY).

Gross Stage 3 Assets% reduced from 3.40% in Sep18 to 3.18% in Sep19

 The Board of Directors of CIFCL today approved the audited financial results for the quarter and half year ended 30^th September 2019.

Highlights:     

Q2 and H1 FY 19-20 Performance:

The company has posted a strong performance in Q2 and H1 FY20, despite the prevailing tough market conditions.

Performance Highlights:

·           Aggregate disbursements for half year were at ₹15,954 Cr against ₹13,913 Cr in the previous half year of FY 19, registering a growth of 15%. The disbursements for the quarter ended September 19 were at ₹ 7,381 Cr as against ₹ 6,899 Cr for the quarter ended September 18, registering a growth of 7%.

·           Vehicle Finance (VF) business has clocked a volume of ₹ 12,736 Cr for the period ended September 2019 as against ₹ 11,323 Cr in the previous year, reporting a growth of 12%. The same numbers for the quarter ended September 19 were at ₹5,796 Cr as against ₹5609 Cr for the quarter ended September 18, registering the growth of 3%. The slow-down in VF disbursement can be explained by the stagnation in the industry volumes during this quarter.

·           Home Equity (HE) business disbursed ₹ 2,165 Cr as against ₹ 1,849 Cr for period ended September 2018, marking a growth of 17% Y-o-Y. Disbursements for the quarter ended September 2019 were at ₹ 1,064 Cr as against ₹ 910 Cr for the quarter ended September 18 registering a growth of 17%.

·           AUM grew by 23% at ₹ 64,409 Cr in H1 FY20 as compared to ₹ 52,486 Cr in H1 FY19.

·           Vehicle Finance (VF) AUM grew by 24% to ₹ 43,901 Cr in H1 FY20 as against ₹ 35,507 Cr in H1 FY19.

·           Home Equity (HE) AUM grew by 17% to ₹ 12,612 Cr in H1 FY20 as against ₹ 10,742 Cr in H1 FY19.

·           Profits before Tax (PBT) for the half year ended September 2019 were at ₹ 1,006 Cr as against ₹ 898 Cr last year registering a growth of 12%. For the quarter ended September 19, the PBT was at ₹ 523 Cr as against ₹ 460 Cr for the quarter ended September 18, registering the growth of 14%.

·           The PBT-ROTA for H1 FY20 is at 3.4% and ROE for H1 FY 20 is at 19%

·           Our Branch presence increased to 1029 Branches in H1 FY20.

Asset Quality

Notwithstanding the tight market conditions, CIFCL continues to demonstrate strong asset quality and has been able to reduce the Stage 3 receivables from 3.40% in Sep’18 to 3.18% in Sep’19 (under IND AS) with a provision coverage of 34.4%. As per the traditional IGAAP approach too, the GNPA levels have reduced from 2.95% in Sep’18 to 2.75% in Sep’19 with a provision coverage of 43.1%.

Capital Adequacy:

The Capital Adequacy Ratio (CAR) of the company as on 30^th September 2019, was at 17.09% as against the regulatory requirement of 15%.

Changes in Tax Rates:

Pursuant to the Taxation Laws (Amendment) Ordinance 2019, promulgated on 20th September 2019, the Company intends to exercise the option permitted u/s 115BAA of the Income Tax Act, 1961 to compute income tax at the revised rate (i.e. 25.17%) from current financial year and accordingly has re-measured the current/deferred tax and the consequential effect has been fully recorded in the current period. Additional income tax expense of ₹ 80.21 Cr and ₹ 126.73 Cr has been recognized for the quarter and half year ended September 30,2019 respectively.

Executive Director’s Comments:

Commenting on the results, Arun Alagappan, Executive Director, stated “In Q2 of FY 20, we were able to register a growth of 7% in our disbursements over Q2 of FY 19, in spite of the severe

slowdown in the market.  The growth in AUM was over 20%. In Vehicle Finance, since there was slow down in commercial vehicle space, we increased our focus on the refinance and passenger vehicle segments to sustain our growth momentum. With recent government announcements as well as slew of festive season offers, we hope the volumes improve in the next few months. In the Home Equity and the Home Loan businesses we were able to deliver steady growth and we are positive on the business outlook for the rest of the year.”