Cholamandalam Investment NCD Tranche IV January 2024: Key details you need to know

20 Jan 2024 , 10:06 AM

Established in 1978, Cholamandalam Investment and Finance Company Limited (Chola) is a non-banking financial company classified as an NBFC Investment and Credit Company (NBFC-ICC). It serves as the financial services arm of the Murugappa Group.

Initially focusing on equipment financing, Chola has diversified its portfolio to encompass vehicle finance, loans against property, home loans, supply chain financing, term loans, equipment financing, loans against securities, and invoice discounting for small and medium-sized enterprises (SMEs). The company also provides consumer and small enterprise loans, secured business and personal loans, and offers investment advisory services, stock broking, and various other financial services.

The company has launched its debt offer, and the subscription period for this offer will be from January 19 to February 02, 2024. Click here to apply in the Cholamandalam Investment and Finance Company 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 IND AA+/Stable by India Ratings & Research Private Limited and ICRA AA+ (Stable) by ICRA Limited.

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

Cholamandalam Investment and Finance Company has allotted 250% each to HNI and non-institutional investors. Institutional investors’ has also allotted 30% of the offer while rest 20% is allotted to retail investors. 

These NCDs have tenures of 24, 36, nd 60 Months. It offers coupon rates from 8.45% to 8.60% based on the selection of investors. The frequency of interest payments will be annually or cumulative. 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:

	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	24 Months	24 Months	36 Months	36 Months	60 Months	60 Months
Coupon (% per Annum)	8.45%	NA	8.50%	NA	8.60%	NA
Effective Yield (% per Annum)	8.44%	8.45%	8.49%	8.50%	8.59%	8.60%
Amount on Maturity (In Rs.)	Rs 1,000.00	Rs 1,175.88	Rs 1,000.00	Rs 1,277.58	Rs 1,000.00	Rs 1,511.28

RHP:

https://files.cholamandalam.com/files/Tranche+IV+Prospectus.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 IV January 2024 is managed by AK Capital Services Limited. KFin Technologies Limited is the registrar of NCD and IDBI Trusteeship Services Limitedis debenture trustee to the same.