Cholamandalam Investment NCD Tranche II: Key details you need to know

28 Jul 2023 , 10:36 AM

Cholamandalam Investment and Finance Company Limited (Chola) is the financial services arm of the Murugappa Group. The company offers vehicle finance, home loans, home equity loans, SME loans, investment advisory services, stock broking, and other financial services. It is coming up with a debt offer which is starting for subscription from July 28 to August 10, 2023. Click here to apply in the Cholamandalam Investment and Finance Company Limited NCD. 

The company is raising Rs 500 crore from the issue at a price of Rs 1000 each. Investors need to apply for a minimum of 10 NCDs in a lot. The company has received rating of ICRA AA+ (Stable) by ICRA Limited and IND AA+ (Stable) by India Ratings & Research Private Limited.

Cholamandalam Investment and Finance Company Limited has reserved 30% quota for institutional investors, 25% for non-institutional investors and high net-worth each and 20% for retail investors.

The company will use the net proceeds from the issue towards onward lending, financing, and repayment of interest and principal of existing borrowings and other general corporate purposes.

These NCDs have tenures of 22 months, 37 months, and 60 months. It offers coupon rates from 8.25% to 8.40% based on the selection of investors. The frequency of interest payments will be Annual or Cumulative as per the choice of investors. Allotment of these NCDs will be in dematerialized mode only. Application is to be made through ASBA mode only.

Check the coupon rates of NCDs of Cholamandalam Investment and Finance Company Limited 

	Series 1	Series 2	Series 3	Series 4	Series 5	Series 6
Frequency of Interest Payment	Annual	Cumulative	Annual	Cumulative	Annual	Cumulative
Nature	Secured	Secured	Secured	Secured	Secured	Secured
Tenor	22 Months	22 Months	37 Months	37 Months	60 Months	60 Months
Coupon (% per Annum)	8.25%	NA	8.30%	NA	8.40%	NA
Effective Yield (% per Annum)	8.26%	8.25%	8.30%	8.30%	8.39%	8.40%
Amount on Maturity (In Rs.)	Rs 1,000.00	Rs 1,156.64	Rs 1,000.00	Rs 1,279.15	Rs 1,000.00	Rs 1,497.41

 

RHP:

https://www.akgroup.co.in/docs/Cholamandalam%20Investment%20and%20Finance%20Company%20Limited%20%E2%80%93%20Tranche%20II%20Prospectus%20dated%20July%2027,%202023.pdf

Tax implications:

• Interest on debentures received by resident debenture holders would be subject to tax at the normal rates of tax in accordance with and subject to the provisions of the I.T. Act.
• As per section 2(29AA) read with section 2(42A) of the I.T. Act, a listed debenture is treated as a longterm capital asset if the same is held for more than 12 months immediately preceding the date of its transfer.
• As per section 2(42A) of the I.T. Act, a listed debenture is treated as a short-term capital asset if the same is held for not more than 12 months immediately preceding the date of its transfer.
• In case debentures are held as stock in trade, the income on transfer of debentures would be taxed as business income or loss in accordance with and subject to the provisions of the I.T. Act.
• Income tax is deductible at source on interest on debentures, payable to resident debenture holders at the time of credit/ payment as per the provisions of section 193 of the I.T. Act.

Cholamandalam Investment NCD Tranche II is managed by AK Capital Services Limited. Kfin Technologies Limited is the registrar of NCD and Idbi Trusteeship Services Ltd is debenture trustee to the same.