According to President and CFO Arul Selvan, the action would reduce the AUM growth from the previously anticipated 25–30% to 20–23% this fiscal year.
Cholamandalam Cuts AUM Forecast
President and chief financial officer Arul Selvan has informed Moneycontrol that Cholamandalam Investments & Finance Company would cut down on payments to Supply-chain finance and Fintech partnerships.
According to Selvan, the action would reduce the company’s Assets Under Management (AUM) growth from the previously anticipated 25–30 percent to 20–23 percent in the current fiscal year.
“We aim to minimize the disbursements in that area since the Supply-chain finance is offering us a lower return,” Selvan said.
Disbursements Dip, Recovery Ahead
Due to Monsoon and seasonal variables, he expects disbursements to stay low throughout the July–September quarter. However, he anticipates a recovery in the third quarter, which will be bolstered by the Festival season and favorable rainfall.
Cholamandalam’s total disbursements for the June quarter were Rs 24,326 crore, a little decrease from Rs 24,332 crore during the same time last year.
Vehicle Loans Drive AUM
The bulk of the Rs 13,647 crore in disbursements went towards Automobile loan. The firm then had Consumer and small business debts of Rs 2,046 crore, followed by a Loan against property of Rs 4,705 crore.
Selvan stated that loans issued via Fintech partners totaled Rs 1,500 crore out of the whole loan book.
In the June quarter, the company’s AUM increased by 24% year over year to Rs 1.92 lakh billion.
According to an Investor presentation, Vehicle financing makes up around 54% of the AUM, second only to loans secured by real estate, and 10% to Housing loans.