Cholamandalam’s total disbursements may cross ₹1-lakh crore in FY25
Cholamandalam Investment & Finance Company Ltd is poised for a significant milestone in FY25, with total disbursements set to exceed ₹1 lakh crore, driven by a projected 20-25 per cent growth.
In FY24, the Murugappa Group NBFC saw a 33 per cent increase in total disbursements, reaching ₹88,725 crore.
For FY25, the company anticipates 20-25 per cent growth in total disbursements and 25-30 per cent growth in AUM. However, these are preliminary estimates and a clearer picture of the growth rate will emerge later, the management said during the Q4FY24 earnings call. Even with a 20 per cent rise in total disbursements in FY25, the total amount is expected to reach about ₹1.06 lakh crore. The company’s primary business segment, vehicle finance, is on track to surpass ₹50,000 crore and could reach about ₹58,000 crore. Its AUM (assets under management) stood at ₹153,718 crore as of March 31, 2024.
DOMINANT SEGMENT
Despite a decline in the vehicle finance segment’s share of total disbursements from 72 per cent in FY22 to 54 per cent in FY24, it is expected to remain the company’s dominant business segment. The share of other key secured segments, such as home loans and loans against property, may increase. Also, the combined share of the new businesses, i.e, consumer and small enterprise loan, SME finance, and secured business & personal loans has increased to 23 per cent of total disbursements in FY24 from about 7 per cent in FY22.
In vehicle finance, which focuses on lending to cars, trucks, two-wheelers, tractors and construction equipment in both new and used segments, the company’s targeted approach seems to be paying o. With roughly 85 per cent of its total branches (1387) in rural areas, the rural segment makes up about 60 per cent of vehicle finance disbursements.
“In this segment, the focus is on the customers in the middle of the pyramid. Our idea has been to lend to the people who use the vehicles for their business purposes or livelihoods. So, these customers are happy to pay the installments. We will continue to focus on this set of customers,” D Arulselvan, President and CFO of the company, told businessline.