Cholamandalam Investment and Finance Company , a prominent player in the Indian financial services sector, is poised for potential margin improvements in the coming months, according to recent statements from the company's management.

Expected Margin Improvement

CFO Arul Selvan D has indicated that the company anticipates an improvement in net interest margins over the next two quarters. This optimistic outlook is primarily driven by two key factors:

1. Falling interest rates in the broader market
2. Lower bank lending rates, which are expected to reduce the company's funding costs

Loan Portfolio Composition

The company's loan portfolio structure plays a crucial role in this anticipated margin improvement:

• 55% of the loan portfolio consists of fixed-rate loans
• Vehicle financing makes up a significant portion of these fixed-rate loans

This composition allows Cholamandalam to potentially benefit from lower funding costs without necessarily passing on rate reductions to customers in the fixed-rate segment.

Impact on Different Loan Products

The company's diverse loan offerings will be affected differently by the changing interest rate environment:

• Fixed-rate loans: Primarily vehicle financing, these loans are expected to benefit from lower funding costs without corresponding rate reductions for customers.
• Floating-rate products: For products such as loans against property and home loans, the company plans to pass on rate benefits to customers.

Diversification Strategy

Cholamandalam has outlined a gradual diversification plan for the next three years:

• Shift focus from vehicle finance
• Increase presence in mortgage businesses, including:
  • Home loans
  • SME loans
  • Secured business loans

Growth Targets and Competitive Landscape

The company has set ambitious growth targets while acknowledging the competitive market conditions:

• Target of 20-22% growth in assets under management for FY26
• Recognition that new loans will need to be offered at competitive lower rates
• Expectation that the impact on the overall loan book will take time to materialize significantly

As Cholamandalam Investment and Finance Company navigates the changing interest rate environment and implements its diversification strategy, investors and market observers will be keenly watching how these moves translate into financial performance and market position in the coming quarters.

Cholamandalam Investment and Finance Company has received a request from Yanmar Coromandel Agrisolutions Private Limited (YCAS) to be reclassified from the 'Promoter and Promoter group' category to the 'Public' category. This development comes in the wake of significant changes in YCAS's ownership structure.

Shareholding Changes Trigger Reclassification Request

The reclassification request follows a substantial reduction in Coromandel International Limited's (CIL) shareholding in YCAS. CIL's stake in YCAS has decreased from 40% to 10.60%, prompted by a significant fund infusion of Rs 149.72 crore by Yanmar Asia (Singapore) Corporation Pte Ltd (Yanmar Singapore) on September 27, 2024.

As part of this transaction, YCAS allotted 11,09,00,741 equity shares with a face value of Rs 10 each to Yanmar Singapore. This allotment has resulted in CIL's shareholding in YCAS falling below the 20% threshold, which is a key criterion for promoter group classification under SEBI regulations.

Current Shareholding and Regulatory Compliance

It's important to note that YCAS currently holds no shares in Cholamandalam Investment and Finance Company. The company has confirmed this in its regulatory filing, stating:

Next Steps in the Reclassification Process

The reclassification request from YCAS will be presented to Cholamandalam Investment's Board of Directors for approval, as required under Regulation 31A(3) of the SEBI Listing Regulations. Following the board's approval, the company will seek necessary approvals from the National Stock Exchange of India Limited (NSE) and BSE Limited.

Regulatory Assurances

In its request letter dated September 16, 2025, YCAS has provided several assurances to comply with SEBI regulations. These include confirmations that neither YCAS nor any person related to it:

• Holds more than 10% of the total voting rights in Cholamandalam Investment
• Exercises control over the company's affairs directly or indirectly
• Has any special rights through formal or informal arrangements
• Is represented on the board of directors or acts as a key managerial person
• Is classified as a 'willful defaulter' or categorized as a fugitive economic offender

This reclassification request underscores the dynamic nature of corporate structures and shareholding patterns in the financial sector. It also highlights the importance of regulatory compliance and transparency in India's corporate landscape.