Cholamandalam to scale back fintech, supply-chain financing

Cholamandalam Investment

Cholamandalam Investments & Finance Company will reduce disbursements to fintech partnerships and supply-chain financing,  president and chief financial officer Arul Selvan has told Moneycontrol.

Selvan said the move will curb the company's Assets Under Management (AUM) growth to 20-23 percent in the current fiscal from the previously projected 25-30 percent.

“The supply-chain financing is giving us a lower yield and hence, we want to reduce the disbursements in that segment,” Selvan said.

He disbursements to remain low in the July-September quarter due to monsoon and seasonal factors but expects an improvement in the third quarter buoyed by festival season and good rains.

In the June quarter, Cholamandalam's total disbursements stood at Rs 24,326 crore, a slight drop from Rs 24,332 crore in the year-ago period.

The majority of disbursements were towards vehicle finance at Rs 13,647 crore. This was followed by loan against property at Rs 4,705 crore and company have consumer & small enterprise loans worth Rs 2,046 crore.

Selvan added of the total loan book, loans disbursed through fintech partners stood at Rs 1,500 crore.

The company’s AUM surged 24 percent year-on-year to Rs 1.92 lakh crore in the June quarter.

Vehicle finance accounts for around 54 percent the AUM, 23 percent loan against property and 10 percent housing loan, according to an investor presentation.