Cholamandalam expects AUM to grow at 23-24% in FY27

D Arul Selvan, Chief Financial Officer at CIFCL

Murugappa Group NBFC Cholamandalam Investment and Finance Company Ltd (CIFCL) expects to grow its assets at around 23–24 per cent in FY27, and is choosing to retain its earlier growth guidance despite a strong Q2 (July-September).

While acknowledging that quarters 3 and 4 have been always better than first two quarters, D Arul Selvan, Chief Financial Officer at CIFCL, told businessline that among other reasons, the base of H2 FY26 was higher, and they are hence not pushing up the guidance higher. Similarly, on the pre-tax return on assets (ROA), he said they are choosing to remain cautious on various counts.

“While we have the levers to reach 3.5 per cent pre-tax ROA, interest cost is going up a bit and we need to see where we close the year with regard to our various other parameters of OPEX and credit cost,” he said.

CIFCL has seen a healthy 47 per cent disbursement growth across businesses in the September quarter and loan losses have been significantly lower than last year. AUM at ₹2,68,000 crores grew 25 per cent year-on-year. Asset quality also improved.

Despite cost of funds moving up, with borrowing rates influenced by foreign exchange movements, liquidity conditions and international interest rates, Selvan said the company has been able to protect its net interest margins (NIMs) on account of the growing contribution from its newer lending businesses, which carry relatively higher yields.

Equity capital raise

On the equity front, Cholamandalam has obtained an enabling board resolution to raise up to ₹5,000 crore via QIP, which the CFO expects to execute over the next three to nine months, depending on market appetite.

“The proposed equity capital raise is for the existing businesses only; as we keep growing, we need to also keep improving our capital adequacy and build this capital,” he said.

On concerns over asset-quality stress in the gold-loan segment noted by some NBFCs, Selvan said that CIFCL’s exposure remains relatively small and the company has been cautious in its underwriting and expansion strategy.

“We have a very strong auditing and assessment process, where the gold goes through at least three or four different audits, depending on different sampling approaches,” he said. Of the 360 branches planned by CIFCL for gold loans in the current fiscal, around 250 have already been opened in the first half, suggesting strong expansion.

On the demand outlook, the CFO said the rural market has not shown signs of a slowdown so far and the festive season has also provided positive indications with October performing well and November expected to remain healthy.

Published on November 2, 2026