Sundaram Finance Limited (SFL) has made a significant strategic move in the financial services sector. The company's Board of Directors has granted in-principle approval for the acquisition of Capitalgate Investment Advisors Private Limited (CGIA) by its subsidiary, Sundaram Alternate Assets Limited (SAAL). This decision marks a notable expansion in SFL's portfolio of financial services.

Key Details of the Acquisition

The acquisition involves the following key aspects:

About Capitalgate Investment Advisors

CGIA, incorporated in 2017, specializes in credit research on listed fixed income securities. The company's clientele includes high-net-worth individuals (HNIs), corporate treasuries, pension funds, and insurance companies. These clients are either current investors in Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) managed by Sundaram Alternates or potential investors.

Financial Performance of CGIA

CGIA's recent financial performance shows promising growth:

Strategic Rationale

The acquisition of CGIA aligns with Sundaram Finance's strategy to enhance its research capabilities and expand its offerings in the alternative investment space. CGIA is currently developing an AI engine capable of delivering real-time research to users, which could significantly benefit SAAL's fund business.

Regulatory Compliance

The transaction has been classified as a related party transaction and has received prior approval from the Audit Committee of Sundaram Finance Limited. This approval was necessary as the transaction value (₹35 crore) exceeds 10% of the standalone turnover of SAAL (₹12.37 crore for FY 2024-25).

Outlook

This acquisition represents a strategic move by Sundaram Finance to strengthen its position in the financial services sector, particularly in the areas of credit research and alternative investments. The integration of CGIA's expertise and its developing AI capabilities could potentially enhance SAAL's fund management capabilities and offer more value to its investors.

As the financial services landscape continues to evolve, such strategic acquisitions may become increasingly important for companies looking to stay competitive and offer comprehensive solutions to their clients.

Sundaram Finance , a prominent non-banking financial company, has reported strong financial results, including record disbursements and significant growth across key metrics.

Financial Highlights

Record Disbursements

Sundaram Finance achieved record total disbursements of ₹15,423 crores, demonstrating strong market demand for the company's financial services. The quarterly disbursements rose to ₹8,113 crores, marking an 18% increase compared to the same period in the previous year.

Profitability Improvement

The company's profit after tax saw a substantial improvement, increasing by 27% to reach ₹823 crores. This significant growth in bottom-line performance indicates effective cost management and operational efficiency.

Asset Growth

Sundaram Finance's assets under management (AUM) grew by 15.3% to ₹55,419 crores, reflecting the company's expanding business operations and increased market share in the non-banking financial sector.

The robust growth across disbursements, profitability, and assets under management suggests that Sundaram Finance has been successful in expanding its business operations while maintaining strong financial performance. This may be attributed to factors such as increased lending activities, improved operational efficiency, or favorable market conditions in the non-banking financial sector.