Chola Aims for 25-30% Asset Under Management Growth in FY24

Cholamandalam Investment and Finance Company (Chola), the financial services arm of the Murugappa Group, has set its sights on achieving robust growth in its asset under management (AUM) for the fiscal year 2024. The Chennai-based non-banking financial company (NBFC) is targeting a 25% to 30% increase in AUM.

Chola is planning to significantly increase the share of its new business verticals within the overall AUM over the next two to three years. These new businesses, including consumer and small enterprise loans, secured business and personal loans, and SME loans, were launched last year and currently make up 10% of the AUM.

Arul Selvan, President and CFO of Chola, highlighted the company's diversified portfolio and nationwide presence, which positions it well to capitalize on demand, both in terms of products and geographic reach. In the second quarter of the current fiscal year, Chola achieved substantial disbursements and AUM growth.

For the fiscal year 2023, Chola's AUM amounted to Rs 1,12,782 crore, with total disbursements reaching Rs 66,532 crore. In the second quarter of fiscal year 2024, the AUM grew by 46%, driven by all product verticals, particularly vehicle finance, which rose by around 38%. The loan against property business increased by 42%, while the home loan business saw a remarkable 112% increase.

Arul Selvan also emphasized the expansion of their business into different geographies, including tier-II and tier-III cities, particularly in eastern regions like Odisha and Bihar, and western geographies such as Maharashtra and Gujarat.

On the liability side, Chola has managed to keep the cost of funds down and marginally increase the net interest margin (NIM). Yields are improving, and cost of funds remains stable. The company is actively working to control operating expenses.

Regarding the new businesses, Selvan noted that aggressive growth in Q2 may slow down in the third and fourth quarters as the corresponding quarters in the previous year had a higher base. Chola issued equity shares and compulsorily convertible debentures to raise capital, ensuring that it meets its capital adequacy requirements.

The company's capital adequacy ratio is currently around 20%, well above the regulatory requirement of 15%, with tier-I capital at 14.66% and tier-II capital at 1.96%.

Chola's growth strategy and financial stability reflect its commitment to providing financial services to a broader customer base while maintaining a strong capital position.

Keywords: Cholamandalam Investment and Finance Company, Chola, asset under management, AUM growth, financial services, new business verticals, non-banking financial company, vehicle finance, home loans, capital adequacy, financial stability.

Tags: Chola financial news, AUM growth strategy, financial services expansion, new business verticals, capital adequacy, financial stability, non-banking financial company, Chola performance, vehicle finance, home loans, capital raise.