8.4% Cholamandalam NCD July-2023 – Issue Details and Review

Cholamandalam NCD issue opened for subscription now and closes on August 10, 2023. Cholamandalam Finance provides vehicle loans, home loans, SME loans etc., It offers 22, 37 and 60 months tenure NCDs.  Should you invest in Cholamandalam Investment NCD issue of July, 2023? What are the risk factors one should consider before investing in Cholamandalam NCD 2023?

Also Read: Mutual Funds that generated highest SIP Returns in last 20 years

About Cholamandalam Investment and Finance Limited

Cholamandalam Investment and Finance Company Limited is part of Murugappa Group that provides vehicle finance, home-loans, home equity loans, SME loans, investment advisory services, stock broking, and other financial services.

Cholamandalam Finance has 1166+ branches across India with AUM above Rs 1,03,789 Crores. It has over 21 lakhs customers spanning across India.

Cholamandalam NCD – July-23 / August 2023 issue details

Subscription opening Date 28-Jul-23
Subscription closure Date 10-Aug-23
Issuing Security Name Cholamandalam Investment and Finance Company Limited
Security Type Secured, Redeemable and Non-Convertible NCDs
Issue Size (Base) Rs 500 Crores
Issue Size (Option to retain over subscription) Rs 1,000 Crores
Total Issue Size Rs 1,500 Crores
Issue price Rs 1,000 per bond
Face value Rs 1,000 per bond
Minimum Lot size 10 bonds and 1 bond there after
Tenure 22, 37 and 60 months tenure
Interest Payment frequency Yearly and on maturity
Listing on Within 6 working days on BSE

Cholamandalam NCD – Interest Rates – July-23 Issue

Frequency of Interest Payment Annual Cumulative Annual Cumulative Annual Cumulative
Tenure (in months) 22 22 37 37 60 60
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.) 1,000 1,156.64 1,000 1,279.15 1,000 1,497.41

What are the credit ratings for these NCDs?

Cholamandalam Investment NCD’s are rated as ICRA AA+ (Stable) by ICRA Limited and IND AA+ (Stable) by India Ratings and Research. Securities with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.

How is the company doing in terms of profits?

Its consolidated profits are as below:

FY2020 – Rs 1,054 Crores

FY2021 – Rs 1,521 Crores

FY2022 – Rs 2,158 Crores

FY2023 – Rs 2,676 Crores

Why to invest in these Cholamandalam Finance NCD?

1) These NCD’s offer good interest rates up to 8.4% per annum.

2) Company margins are improving year on year. This would help NCD investors to reduce the default risks in future.

3) These are secured NCDs. I always ask investors to invest in secured NCDs as in case the company gets wind-up / shut down for some reason, investors would still get preference in repayment of capital.

Why not to invest in these NCDs?

1) Currently SFB banks are offering similar interest rates, hence Cholamandalam NCD issue may be not that attractive.

2) Company might face disruption in its sources of funding which can affect the growth of the company

3) Company growth prospectus depends on the overall Indian automotive market and, in particular, demand for LCVs, HCVs and cars and MUVs. Any down trend in such segments can affect company performance

4) Refer NCD prospectus for complete risk factors.

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Should you invest in Cholamandalam Finance July-23 NCD issue?

Cholamandalam NCD issue offers high interest rates. These NCDs are rated as AA+ by ICRA and India Research Ratings. It offers short to medium term tenure NCDs which are good for investment. These are secured NCDs too.

On the other side, small finance banks are offering similar interest rates on the FD schemes. There are risks involved in investing in NBFC company NCD which I keep re-iterating in all these reviews.

Investors who understand all these pros and cons can invest in these NCDs.

Source RHP: Cholamandalam Investment July-22 NCD issue RHP

FAQs on Chlamandalam NCD Issue Jul-2023

These NCD bonds are issued in demat form. You need to login to your demat account, visit NCD / Upcoming NCD issues section, enter desired Qty and amount and proceed to make the payment.

These NCDs would be listed within 6 working days after the closure of the NCD issue.

These NCD’s are rated as AA+/Stable by ICRA and India Ratings & Research. Hence, these can be considered as one of the safest investment options.

Cholamandalam NCD July-23 allotment status would be updated on the website of the registrar of the issue i.e. KFin Technologies.

Suresh KP


  1. The only thing which intrigues me is how Indiabulls Housing Finance with same rating of AA Stable gave 10.15% whle Cholamandam with same rating of AA Stable is giving 8.4% – a huge difference 1.75%.
    My guess is that there is something which is not taken into account by the rating agencies in one case or other, or, there is something which we are not able to understand or missing.

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