Cholamandalam Investment has received a request from Coromandel Engineering Company Limited (CECL) for reclassification from the 'Promoter and Promoter group' category to the 'Public' category. This request follows a change in control of CECL that occurred on December 29, 2023.

Background of the Reclassification Request

The reclassification request is a result of a Share Purchase Agreement executed on September 29, 2023, in which the Murugappa Group divested their entire shareholding in CECL. Consequently, CECL no longer holds any shares in Cholamandalam Investment.

Key Points of the Reclassification Request

Shareholding and Control

• CECL currently holds no shares in Cholamandalam Investment.
• The company confirms it does not hold more than 10% of the voting rights.
• CECL asserts it does not exercise control over Cholamandalam Investment's affairs or possess any special rights through formal or informal arrangements.

Management and Representation

• CECL has no representation on Cholamandalam Investment's board of directors.
• The company is not acting as a key managerial personnel in Cholamandalam Investment.

Regulatory Compliance

The reclassification request complies with Regulation 31A of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015. CECL has confirmed its adherence to all necessary requirements specified under this regulation.

Next Steps

1. Cholamandalam Investment's Board of Directors will review the request for approval.
2. Upon board approval, Cholamandalam Investment will seek further approvals from the National Stock Exchange of India Limited (NSE) and BSE Limited.

Additional Information

CECL formally submitted its reclassification request to Cholamandalam Investment on September 24, 2025. In the request letter, CECL's Chief Financial Officer, Abubucker Ismath Razack, provided additional assurances:

• CECL is not classified as a 'wilful defaulter' by the Reserve Bank of India.
• The company has not been categorized as a fugitive economic offender.
• CECL does not act in concert with the Promoter/Promoter Group of Cholamandalam Investment.
• The company is not privy to any price-sensitive information relating to Cholamandalam Investment and its securities.

This reclassification request signifies a notable change in the relationship between Coromandel Engineering Company Limited and Cholamandalam Investment, reflecting the evolving corporate structure following the Murugappa Group's divestment from CECL.

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.