Chola to maintain 22-25% AUM growth in FY24

Cholamandalam Investment and Finance Co. Ltd. (Chola), the financial services arm of the Murugappa group, will continue to maintain its assets under management (AUM) growth in the range of 22-25% for FY24, according to senior officials.

Cholamandalam Investment and Finance Co. Ltd. (Chola), the financial services arm of the Murugappa group, will continue to maintain its assets under management (AUM) growth in the range of 22-25% for FY24, according to senior officials.

While the retail AUM of non-banking finance companies is expected to grow at a healthy 12-14%, after a strong rebound in 2023, Chola expects its AUM growth to be above the market curve viz. in the range of about 22-25%, said Vellayan Subbiah, chairman and non-executive director, during an earnings call.

Chola said it has six growing businesses viz. Vehicle Finance (VF), Loan Against Property (LAP), Home Loans (HL), SME, Consumer and Small Enterprise Loans (CESL) and Secured Business and Personal Loans (SBPL).

During FY23, Chola posted a 36% growth in its AUM at ₹1,12,782 crore, due to overall growth across all business segments. Aggregate disbursements in Q4 was ₹21,020 crore, of which VF is ₹12,190 crore, LAP ₹2,762 crore, HL ₹1,405 crore, SME  ₹2,104 crore, CSEL ₹2,364 crore and SBPL ₹196 crore.

In about two to three years, vehicle finance would constitute about 50% of AUM from the present 61%, LAP and home loans about 30-35% and new businesses 15%, said CFO Arul Selvan.

Chola is also present in the affordable housing segement. This business was initially concentrated in the South. Last year, the company forayed into Northern, Eastern and Western markets by opening a few branches. During the next 2-3 years, all branches offering vehicle financing will also offer home loans, said ED Ravindra Kundu.