The demerger of Sundaram Finance’s shared services businesses and non-core investments to Sundaram Finance Holdings has received the approval of the National Company Law Tribunal.

According to a press release from the Chennai-based NBFC, the Chennai Division Bench of the Tribunal has approved the Composite Scheme of Arrangement and Amalgamation between Sundaram Finance and its four subsidiaries — Sundaram Insurance Broking Services, Infreight Logistics Solutions, Sundaram BPO India and Sundaram Finance Holdings.

The appointed Date is April 1, 2016, and the scheme will be operative from the effective date, January 18, 2018. All shareholders of SFL as on the record date, February 2, 2018, will be allotted shares in SFHL on 1:1 basis. SFHL will be listed on NSE in due course.

Q3 results

Following the implementation of the scheme, the result of the third quarter of the current year ended December 31, 2017, are not comparable with that of the corresponding quarter previously.

For the third quarter, post the demerger, Sundaram Finance has reported a net profit of ₹126 crore. Its net profit in the previous corresponding quarter was ₹138 crore.

The company pointed out that ₹28 crore representing the net profit of the demerged operations has been reduced from the profits for the third quarter of the current year.

Disbursements were up 46 per cent at ₹4,810 crore (₹3,284 crore). TT Srinivasaraghavan, MD, Sundaram Finance Ltd, said in the release the “robust growth in disbursements was driven by a strong surge in sales of Medium and Heavy Commercial Vehicles.”

Based on the three-month norm Gross NPA stands at 1.74 per cent (2.16 per cent) and net NPA at 0.81 per cent (1.02 per cent). During the quarter, the Long term credit ratings of SFL were upgraded to AAA (Stable Outlook) by ICRA and CRISIL.

comment COMMENT NOW