Cholamandalam Investment and Finance Company Ltd., a Chennai based non-bank finance company, or NBFC, is looking to raise $300 million to $350 million through an inaugural issue of public bonds and has received preliminary pitches from banks including JPMorgan, Citi and HSBC for a mandate, two sources close to and a source familiar with the situation said.
The company is looking for an investment grade issuer rating for its debut USD bond which is challenging for NBFCs in India due to insufficient diversity in the funding mix and more so in the absence of support from a strong parent, the sources close said.
Some banks have reached out to fixed income investors to gauge their interest for the potential issue, sources close said, adding that the discussions are early-stage and no specific discussions around the structure or timing of the issue have been held so far with the investors. The company is looking to diversify its funding sources and in case the bond is issued, the proceeds would be utilized for onward lending, sources close said.
BSE-listed Cholamandalam Investment and Finance Company offers vehicle financing, loans against property, loans to small and medium enterprises and secured business and personal loans among others. As on March 31, 2024 the company’s assets under management stood at INR 1.45 trillion ($17.43 billion), up 37% from a year ago, according to a company
presentation. Its gross non-performing assets stood at 3.54% as on March 31, 2024 as against 4.63% on March 31, 2023.
Cholamandalam did not respond to requests for comment.