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Norwest buys into Murugappa Group’s NBFC Cholamandalam

13 February, 2013

Norwest Venture Partners, along with the existing investor Multiple Alternate Asset Management, has picked up stake in the non-banking finance company Cholamandalam Investment & Finance Co Ltd, by participating in the firm’s qualified institutional placement (QIP).

Venture and growth capital investor Norwest has bought up over a third of the issue, buying 2.65 per cent stake for Rs 108 crore. Norwest has made several investments in India’s financial services sector including Ratnakar Bank, IndusInd Bank and Yes Bank besides the NBFC, Shriram City Union Finance.

Multiples invested Rs 13.5 crore to maintain its 5 per cent stake while hedge fund Amansa Capital also put in a similar amount to maintain its stake. New Vernon and DSP Blackrock were also investors in the issue.

Other existing private equity investors in Cholamandalam Investment include IFC (8.92 per cent) and Creador Capital (5 per cent).

The QIP has seen a dilution of 7.36 per cent stake for Rs 300 crore. The Murugappa Group firm issued over 10.5 million shares at Rs 285 a unit.

Shares of Cholamandalam Investment closed at Rs 280.1 a unit, down 1.87 per cent, giving the firm a market capitalisation of Rs 3,714.13 crore.

Cholamandalam Investment & Finance is primarily involved in vehicle financing and currently focuses on light commercial and small commercial vehicles (LCVs and SCVs). The company has further presence in home loan and personal loan (against assets and properties) segments and it has recently started the gold loan business.

The company reported 41 per cent rise in net sales to Rs 669 crore while profit after tax (PAT) doubled to Rs 81.5 crore for Q3 FY13.

(Edited by Sanghamitra Mandal)


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Norwest buys into Murugappa Group’s NBFC Cholamandalam

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