Chola raises Rs 1,057 crore from ADB via NCDs

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Chennai: Cholamandalam Investment and Finance Company Limited (Chola), the finance arm of the Murugappa Group, said on Monday that it issued unlisted Non-Convertible Debentures (NCDs) in tenors of 3 to 5 years for Rs 1056.90 crore ($150 Million) to the Asian Development Bank (ADB) .

ADB’s assistance to Chola is composed of senior secured nonconvertible debentures to help the company finance its lending operations to Small Road Transport Operators (SRTO) and SMEs. According to a note on the BSE , half of the target under ADB’s financing will be from “lagging states in India, resulting in improved economic growth prospects and employment opportunities in these areas. SRTOs engaged in logistics, distribution, and transport-related industries will be given priority and SMEs seeking loans for investment and working capital will also benefit from access to this term financing.”

ADB is involved in providing medium and long term financing to banks, NBFCs and FIs, with a focus on promoting financial inclusion in lesser developed regions. Principal Investment Specialist for Private Sector Operations at ADB Anshukant Taneja said, “ADB’s financing, which has been provided in the backdrop of a slowdown in credit growth in the Indian banking system, has a countercyclical effect and is expected to boost investments and employment.”

Arun Alagappan, Executive Director of Cholamandalam Investment and Finance Company said “Chola with its focus on funding commercial vehicles for the SRTO segment and to the SMEs is ideally suited to meet ADB’s objectives. We look forward for a lasting relationship with ADB in furthering our goals mutually.”