Chola targets 20-23% AUM growth in FY27, plans ₹5,000 crore QIP fundraise

Cholamandalam Investment and Finance Company (Chola), the financial services arm of the Murugappa Group, has said it expects assets under management (AUM) to grow around 20-23 per cent during the current financial year, despite a higher comparative base during the second half of the previous year owing to the GST 2.0 decision and potential macroeconomic headwinds.

The company said it would raise around ₹5,000 crore through a qualified institutions placement (QIP). "Right now it is an enabling resolution by the board. We should start working on it so that we will come to the market within the next six to nine months maximum," said Chola's President and Chief Financial Officer Arul Selvan D.

The non-banking financial company (NBFC) said the momentum in the automobile sector, which began gaining traction in the final quarter of the previous financial year, was expected to sustain growth across vehicle categories over the next two years.

The company on Wednesday posted a net profit of ₹1,630 crore for the second quarter of FY27, up 41 per cent compared to the same period last year. Its net income for the quarter stood at ₹5,037 crore, up 24 per cent year-on-year (Y-o-Y). Similarly, total AUM stood at ₹2.68 trillion, up 25 per cent.

Stage 3 levels, representing loans more than 90 days past due, stood at 3.25 per cent as of September this year, against 3.29 per cent at the end of June 2026. Gross non-performing assets (GNPA), according to RBI norms, stood at 4.44 per cent as of September, against 4.50 per cent in June. Net non-performing assets (NNPA) stood at 2.92 per cent during the period, compared with 2.95 per cent in June.

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Aggregate disbursements in Q2FY27 stood at ₹35,872 crore. Vehicle finance (VF) disbursements stood at ₹17,801 crore in Q2FY27. The loan against property (LAP) business disbursed ₹6,438 crore in Q2FY27.

Addressing concerns over localised rainfall deficits in parts of South and Central India, Chola said collection stress remained well under control. "Tamil Nadu is getting a good amount of rain. Andhra Pradesh and Maharashtra are seeing a bit of deficiency. So these areas will, may have some amount of lower productivity on the agricultural side. So there can be some amount of hurdle," he said.

In the electric vehicle (EV) segment, the primary bottleneck remains the lack of adequate charging infrastructure, and EVs still account for a small portion of its business, he said.

"EVs have not yet broken the ice significantly on the commercial vehicle side, especially on heavies and lights, because that is dependent on charging infrastructure across the country," he said. "Currently, EV adoption in commercial segments is largely limited to fixed-route operations, such as buses, intra-factory transit, or dedicated mining-to-port routes. For variable, long-distance freight, adoption will take more time until cross-country infrastructure matures."