Cholamandalam Investment and Finance (click here to view this on our SNAP Analytics Tool) – promoted by the Murugappa Group, is a pan-Indian, composite financial services provider. It was established in 1978 and is engaged in the business of providing vehicle finance, home equity finance, business finance, stock broking and distribution of financial products to its customers. Within its businesses it has created a strong position in light commercial vehicle and used vehicle financing in India.
Creador is a private equity firm focused on long-term investments in growth-oriented businesses in India headed by its Founder and Chief Executive Officer – Brahmal Vasudevan. He previously spent 11 years as a General Partner and Managing Director of ChrysCapital, a leading private equity firm focused on growth capital investments in India.
Big Whale Ashish Dhawan was the Managing Director of ChrysCapital (formerly Chrysalis Capital) when Brahmal Vasudevan his Harvard batchmate headed ChrysCapital’s US operations.
Creador’s first investment in Chola Fin was back in 2012. Two new private equity firms picked up a 10% stake i.e. Creador Capital and Multiples Alternate Asset Management invested Rs 212 crore in the NBFC to facilitate its expansion plans.
“We are delighted to have this opportunity to be associated with Cholamandalam, a company with an outstanding promoter group and corporate governance standards. We have been very impressed with the strategic focus and outstanding track record of profitable growth” said Brahmal Vasudevan, CEO of Creador.
Within a period of 3 years, the PE firm was able to plough back its entire investment with partial exit from CIF securing a 2.8x multiple and a 33% IRR in US dollar terms.
The proceeds of the divested stake stood at $21.5 million. It had paid $21.3 million for a 5% interest in March 2012. This was when CIL had other backers including the International Finance Corporation (IFC), Apax Partners, WestBridge Capital, Amansa Capital and Aquarius Investment Advisors.
Today, the PE firm sold another small stake worth 154 cr. thereby accounting for a total return of over 290 cr. within a span of 4 years while the firm holds around 25 lakh shares worth over 200 cr. (this is with an initial investment of 106 cr.)
Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.