Cholamandalam post 36 per cent growth in disbursements

Chennai, July 26, 2005: Cholamandalam Investment and Finance Company Limited (Cholamandalam) has posted a 36 per cent growth in disbursements in the period April to June 2005 over the corresponding period of the previous year.

Total disbursements for all categories of vehicles were at Rs.319 crore, up from Rs.234 crore in the same period in 2004. Of this, disbursements for Heavy and Light Commercial Vehicles (HCVs & LCVs), which accounted for almost three-fourths of total disbursements, grew by over 58 per cent.

The Profit Before Tax (PBT) was Rs.11.52 crore. The PBT of Rs.14.02 crore in the same period in the previous year included one-time income of Rs.2.17 crore from sale of investments.

Mr. M Anandan, Managing Director said, "There was significant pressure on spreads in the last few quarters impacting profitability. The company is continuing to realign its product mix, manage liabilities and costs prudently as well as improve lending rates to improve profitability. The results of these efforts should be visible in the subsequent quarters."

At the Annual General Meeting of the company today, shareholders approved the dividend of Rs.5 per share (of par value Rs.10).

Earlier, at the Extraordinary General Meeting held on July 16, 2005, the shareholders of the company approved the preferential issue of shares to DBS Bank of Singapore. Cholamandalam has entered into an agreement with DBS Bank by which DBS and the Murugappa Group will be equal shareholders in the company. The partnership is in the areas of retail finance, asset management and securities. On completion of the transaction, the company intends to enter new product segments in consumer finance.

Cholamandalam offers automobile finance in 120 locations across India. The company's capital adequacy ratio stands at a healthy 17 per cent as against RBI's requirement of 12 per cent.

About Cholamandalam Investment and Finance Company Limited
Cholamandalam Investment and Finance Company Limited (Cholamandalam), along with its subsidiaries and affiliates, offers individual and institutional customers a range of financial services - vehicle finance, corporate and mortgage finance, general insurance, mutual funds, securities broking, distribution of investment products and risk management. Cholamandalam shares are listed on Bombay (BSE) and National (NSE) stock exchanges.

Cholamandalam is part of the Rs 6250 crore Murugappa Group, one of India's largest family-promoted, professionally managed corporate with over 28,000 employees. A pioneer and market leader in several fields with over 40 manufacturing operations across 12 states in India, the group has a strong presence in farm inputs, engineering and cycles, sugar, abrasives, finance, general insurance, sanitaryware, plantations, bio-products and nutraceuticals.

Contact Information
Mr. M. Anandan
Managing Director
Cholamandalam Investment and Finance Company Limited
I Floor, Dare House
Parry's Corner
2, NSC Bose Road, Chennai 600 001.
Tel: 040 - 25307172