Cholamandalam Investment and Finance Company Ltd (CIFCL) is planning to seek shareholders’ approval to significantly increase its borrowings from Rs 1.10 lakh crore now to Rs 2 lakh crore to support the increased volume of operations expected in the coming years.
An enabling special resolution, allowing an 82 per cent increase in borrowings, will be moved at CIFCL’s 45th Annual General Meeting (AGM) on August 1, 2023.
Specifically, the non-banking finance company will seek shareholders’ approval to authorise the board of directors to borrow in excess of the aggregate of the paid-up capital and free reserves up to a sum not exceeding ₹2 lakh crore and to create charge, mortgage, hypothecation, lien, pledge over the assets / properties of the company.
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“In view of the increased volume of operations planned in the coming years, it is necessary to increase the borrowing limits of the company to ₹2 lakh crores,” according to CIFCL’s annual report.
At the AGM held in July 2022, the members (by way of a special resolution) gave their sanction to the board of directors to borrow over and above the aggregate paid-up share capital, and free reserves up to a limit of ₹ 1.10 lakh crore.
The NBFC, which is part of the Murugappa Group, offers vehicle finance (VF), home loans (HL), loan against property (LAP), SME loans, secured business & personal loans (SBPL), consumer & small enterprises loans (CSEL), among others, to customers.
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“The company will look to scale up through new product segments (CSEL, SME and SBPL), as well as improve efficiencies in existing segments (VF, LAP and HL).
“The company’s strong sales and collections set-up, combined with digital initiatives and branch reach, will also support in improving efficiencies,” the report said.
CIFL’s assets under management rose 36 per cent year-on-year to stand at Rs 1,12,782 crore as at March-end 2023, against Rs 82,904 as at March-end 2022. Net profit increased 24 per cent yoy to Rs 2,666 crore in FY23, against Rs 2,147 crore in FY22.