labels: industry - general, murugappa group, banks & institutions
Cholamandalam, DBS strengthen tie-upnews
27 January 2006
Chennai: The $1.6-billion Murugappa Group and Singapore''s DBS Bank today announced the closure of the transaction leading to both becoming equal partners in the joint venture Cholamandalam Investment & Finance Company Limited (CIFCL).

CIFCL will be renamed "Cholamandalam DBS Finance Limited" following the receipt of regulatory and shareholder approvals. The Murugappa Group and DBS Bank each hold 37.48 per cent of the equity in the joint venture company with the public holding the remaining 25.04 per cent being with the public. DBS acquired 20 per cent of its stake from the public through an open offer and the remaining 17.48 per cent from Tube Investments of India Ltd (TI) through a share purchase agreement after obtaining the regulatory approvals.

The board of directors of the company now comprises nine members with Rajan Raju, Susan Ho and Pranam Wahi joining the board as DBS Bank''s representatives. M A Alagappan continues as chairman.

The company has also announced a new personal loan product, to be available initially in Chennai, Bangalore and Coimbatore, followed by a nationwide rollout in the coming months.

Rajan Raju, managing director, South and South East Asia, DBS Bank, said, "We look forward to working with the well-respected and well-established Murugappa Group to develop Cholamandalam DBS Finance into a leader in consumer finance in India. We will capture the growing wealth management business opportunities through DBS Cholamandalam Asset Management, DBS Cholamandalam Securities and DBS Cholamandalam Distribution Services. This partnership underscores DBS'' continued commitment to India and positions us well to service India''s growing connectivity to Asia."

M Anandan, Managing Director, Cholamandalam, said: "I am delighted that the joint venture is now fully operational. We are committed to making available competitive consumer finance products to service the needs of our customers. Following the launch of our personal loan product, we are looking to introduce home equity loans in the next few months."

The company also announced financial results for the quarter ended December 31, 2005. Total disbursements for the first nine months of the year increased 17 per cent to Rs.930 crore on the back of strong used-vehicles finance. The company''s gross managed assets rose 19 per cent to Rs2,210 crore. Profit before tax was Rs39.7 crores.

Singapore-based DBS is one of the largest financial services groups in Asiaand the largest bank in Singapore and the fifth largest banking group in Hong Kong as measured by assets, with leading positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund raising.

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Cholamandalam, DBS strengthen tie-up