Cholamandalam Investment to raise Rs 5,000 cr through AA-rated NCDs

Cholamandalam Investment and Finance Company, the financial services arm of the diversified Murugappa Group, on Thursday announced its maiden public issue of debt sales worth Rs 5,000 crore in multiple tranches with an opening issue pegged at Rs 1,000 crore.

Cholamandalam Finance said the move is to diversify its funding source which currently is heavily skewed towards banks.

The Rs 1,000-crore first tranche will open on April 25 and close on May 9, offering an annual coupon of up to 8.40 per cent for 60 months and 8.25 per cent for 22 months.

The first tranche includes a base issue of Rs 500 crore with an option to retain oversubscription of up to Rs 500 crore, D Arulselvan, President and Chief Financial Officer of the Chennai-based company, told reporters.

The AA-rated NCDs will be listed on the BSE and NSE, and the primary investor target (up to 85 per cent) is retail customers, he said.

Arulselvan said that the company's asset under management (AUM), which is heavily auto-loan