Funds advised by Apax Partners to invest INR 5 billion (USD 84 million) in Cholamandalam

28th July 2014

On 26 July, 2014, the Board of Directors of Cholamandalam approved a preferential issue of INR 5 Billion of Compulsorily Convertible Preference Shares to Dynasty Acquisition (FDI) Ltd, a company backed by Apax Funds

Chennai, India and London, UK – On 26 July, 2014, the Board of Directors of Cholamandalam Investment and Finance Company Limited (“Chola”) approved a preferential issue of INR 5 Billion of Compulsorily Convertible Preference Shares (“CCPS”) to Dynasty Acquisition (FDI) Ltd, a company backed by funds advised by Apax Partners ("Apax Funds"). The CCPS will carry a dividend coupon of 1% per annum payable from the date of allotment of CCPS until the date of conversion into equity shares.  The CCPS shall be converted into equity shares at the expiry of 12 months from the date of allotment or earlier, at the discretion of the Board.  

Chola was incorporated in 1978 as the financial services arm of the Murugappa Group.  Chola commenced business as an equipment financing company and has today emerged as a comprehensive financial services provider offering vehicle finance, home loans, home equity loans, SME loans and a variety of other financial services to customers.  Chola operates from over 575 branches across India with assets under management above INR 250 Billion.  

This capital infusion will enable Chola to continue to grow its business rapidly in a recovering macroeconomic environment in India and to augment its Tier 1 capital adequacy ratio (CAR). 

Commenting on the occasion, Mr. S. Vellayan, Managing Director of Chola said, “We are glad to have the opportunity to work with Apax, a leading global private equity firm in this round of capital infusion.” 

Mr. Shashank Singh, Managing Director and Head of Apax Partners, India said, “Apax Funds are delighted and proud to be to partnering with the Murugappa Group, one of India’s leading and most-respected groups.  We believe in the long term secular growth runway of Indian retail financial services and Chola is well positioned in this space, with an outstanding management team and exposure to attractive lending segments.”   

The proposed preferential issue is subject to the approval of the members of the Company and any other applicable regulatory approvals. 

Advisers 

The M&A advisor to Apax Funds was Kotak Mahindra Capital Company.  Khaitan & Co and Kirkland & Ellis LLP provided legal counsel to Apax Funds on this transaction.  Axis Capital Limited was the exclusive transaction advisor to Chola for this fund raise.  

About Apax Partners

Apax Partners is one of the world's leading private equity investment groups.  It operates globally and has more than 30 years of investing experience.  Apax Partners has advised funds that total over $40 billion around the world in aggregate.  Funds advised by Apax invest in companies across four global sectors of Consumer, Healthcare, Services and Tech & Telco.  These funds provide long-term equity financing to build and strengthen world-class companies.  For further information about Apax, please visit www.apax.com. 

About Cholamandalam Investment and Finance Company Limited 

Cholamandalam Investment and Finance Company Limited was incorporated in 1978 as the financial services arm of the Murugappa Group. Chola commenced business as an equipment financing company and has today emerged as a comprehensive financial services provider offering vehicle finance, home loans, home equity loans, SME loans, investment advisory services, stock broking and a variety of other financial services to customers.  Chola operates from over 575 branches across India with assets under management above INR 250 Billion.  The subsidiaries of Cholamandalam include Cholamandalam Securities Limited (CSEC) and Cholamandalam Distribution Services Limited (CDSL).  The vision of Chola is to help people enter a better life.  Chola has a growing clientele of over 7.5 lakh happy customers across the nation.  Ever since its inception and all through its growth, the company has kept a clear sight of its values.  The basic tenet of these values is a strict adherence to ethics and a responsibility to all those who come within its corporate ambit - customers, shareholders, employees and society.  For further information about Cholamandalam, please visit www.cholamandalam.com.  

About Murugappa Group 

Founded in 1900, the INR 243 Billion Murugappa Group is one of India's leading business conglomerates. The Group has 28 businesses including eleven listed Companies traded in NSE & BSE. Headquartered in Chennai, the major Companies of the Group include Carborundum Universal Ltd., Cholamandalam Investment and Finance Company Ltd., Cholamandalam MS General Insurance Company Ltd., Coromandel International Ltd., Coromandel Engineering Company Ltd., E.I.D. Parry (India) Ltd., Parry Agro Industries Ltd., Sabero Organics Ltd., Shanthi Gears Ltd., Tube Investments of India Ltd., and Wendt (India) Ltd. 

Market leaders in served segments including Abrasives, Auto Components, Cycles, Sugar, Farm Inputs, Fertilisers, Plantations, Bio-products and Nutraceuticals, the Group has forged strong alliances with leading international companies like Groupe Chimique Tunisien, Foskor, Mitsui Sumitomo, Morgan Crucible and Sociedad Química y Minera de Chile (SQM).  The Group has a wide geographical presence spanning 13 states in India and 5 continents. 

Renowned brands like BSA, Hercules, Ballmaster, Ajax, Parry’s, Chola, Gromor and Paramfos are from the Murugappa stable.  The organization fosters an environment of professionalism and has a workforce of over 32,000 employees.  For further information about Murugappa Group, please visit www.murugappa.com.  

Contacts

Apax Partners    
Sarah Rajani CFA
Director of Communications
Apax Partners      
t: +44 20 7666 6573
e: sarah.rajani@apax.com

Apax Partners US Enquiries
Todd Fogarty
Senior Vice President
Kekst & Company
t: +1 212 521 4854
e: todd-fogarty@kekst.com