Cholamandalam Investment shares rise 8% as firm terms Cobrapost report as 'malicious and baseless'

Cholamandalam Investment shares rise 6% as firm terms Cobrapost report as 'malicious and baseless'

Shares of Cholamandalam Investment and Finance Company Ltd climbed 8% on December 23 after the Murugappa Group company clarified on allegations made by Cobrapost in a report.

"The entire allegations (in the report) are malicious and baseless stated with ulterior motives," said Cholamandalam in a stock exchange filing. The company re-assured investors that performance, asset quality and liquidity position remain robust.

"The Company wishes to reassure its investors that the performance of the Company, its asset quality and its liquidity position continues to be robust as disclosed in the audited financial statements of the Company for the half year ended September 2025. There is no revision in its guidance provided in the past and the Company will continue to deliver as per its Board approved business plan. The liquidity position of the Company continues to be strong with its cash and bank balances of Rs 14,900 crore as of November 30, 2025," the company added.

The rating of CIFCL continues to be at AA+ from ICRA, India Ratings and CARE, it said. The net worth of the company stood at Rs 26,783 crore as of November 30, 2025, which is an increase of more than Rs 3,000 crore over FY25 closing levels, it further clarified.

Cholamandalam Investment said it has complied with all regulations on reporting such related-party transactions and business practices in its financial statements. It also categorically rejected that certain individuals, including promoters alleged by Cobrapost, were benefitting from such practices.

At 10 am on December 23, Cholamandalam Investment shares were trading 8% higher at Rs 1,711.5 apiece.

Investigative news agency Cobrapost in a blog post late Monday highlighted a "worrying pattern" of large-value cash transactions and related-party transactions between the listed non-banking finance company, its subsidiaries and the parent Murugappa Group. Cobrapost, based on an examination of statutory filings and corporate and financial disclosures, has identified transactions aggregating around Rs 10,262 crore involving Cholamandalam Investment and a network of related parties, including Murugappa Group entities, family members and key management personnel. The investigation further indicates that portions of these funds were routed onward through additional transactions, the nature and purpose of which merit closer regulatory scrutiny, Cobrapost added.

Cholamandalam further said that there is no revision in its guidance provided in the past and the company will continue to deliver as per its Board approved business plan.

The investigation also notes that CIFCL made cash deposits of around Rs 25,089 crore across 14 banks between FY20 and FY25. During this period, the NBFC also earned insurance commissions amounting to Rs 942 crore between 2024 and 2025. Given that a substantial part of CIFCL’s revenue comes from financing vehicles and homes, the records raise questions regarding possible bundling of insurance with vehicle loans, a practice prohibited by insurance regulators.

The company said it predominantly caters to the needs of small road transport operators and self-employed non-professionals, numbering over 50 lakh, spread over 1,700 branches across cities and towns in India. This is in categories of lending such as mortgage and unsecured lending, thereby bringing in financial inclusion for the under served segments in rural and semi-urban geographies across India. "Such borrowers earn and pay in cash, including for their EMIs from us. The amounts so collected in cash are deposited in Banks . This collection process and amount has been subject to internal and external scrutiny. This is also covered by our robust internal systems and subject to statutory audit. All KYC and income tax compliance for such collection is done in compliance with applicable legal requirements," said Cholamandalam.

All payments to Board members, KMP and SMP of CIFCL have been made in compliance with applicable law and have been fully disclosed to the shareholders, the company added.