Chennai, March 30, 2010: In view of the change in the approach and business model for Cholamandalam DBS Finance Ltd., (CDFL) the Partners – Murugappa Group and DBS Bank Ltd., Singapore after a detailed discussion have decided to end the Joint Venture in CDFL and focus on their respective priorities and growth strategies. The Murugappa Group is buying over the entire stake of 37.48% held by DBS Bank. With this acquisition the shareholding of Murugappa Group in CDFL will go up to 74.96%. The stake is being purchased by Tube Investments of India Ltd and New Ambadi Estates Private Ltd, constituent companies of the Murugappa Group.
CDFL is an organization of more than 30 years of standing and has over the years built a strong reputation for integrity, service and soundness. The Company’s traditional businesses are vehicle finance and corporate mortgage products. Home Equity loans as an additional product offering was added in the recent years. The Company after its partnership in 2005 with DBS Bank Ltd., Singapore, entered consumer Loan business. As the experience in the said business had not been satisfactory, CDFL took a decision in September 2008 to exit the business and focus on core / traditional Asset financing businesses.
The change in the JV status will be reflected in the Company and Subsidiaries names and their respective Boards upon completion of necessary formalities.
Mr. A Vellayan, Executive Chairman, Murugappa Group said “The acquisition of stake and the investment made by the Group signifies our firm intentions and focus for the NBFC business. We will grow this business aggressively exploiting the vast opportunity and leveraging on our established relationships with Dealers, OEMs, solid customer base and the Group’s large presence in the agri business”.
Mr. M A Alagappan, Chairman, Chola DBS said “Chola is a strong brand and has been a household name for three decades. This consolidation is a great opportunity for the Group to aggressively grow and re-establish Cholamandalam as a premier NBFC in the Asset financing and wealth management space”.
About the Murugappa Group
Headquartered in Chennai, the Rs. 15,907 crores (USD 3.14 billion) Murugappa Group is one of India’s leading business conglomerates. Market leaders in diverse areas of business including Engineering, Abrasives, Finance, General Insurance, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Bio-products and Nutraceuticals. Its 29 companies have manufacturing facilities spread across 13 states in India. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees. The Group has forged strong joint venture alliances with leading international companies like Mitsui Sumitomo, Foskor, Cargill and Groupe Chimique Tunisien to consolidate its status as one of the fastest growing diversified business houses in India.