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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
Inadequate bad debt provisioning in the face of declining asset quality has helped the company clock impressive profit growth.
Editor's note: Cholamandalam Investment and Finance Co. is no Bajaj Finserv. Its assets are less than a quarter and its top line a third that of India’s leading non-banking financial company. Yet, in 2021-22, Cholamandalam outperformed the country’s most valued NBFC on two key metrics. Its share price and profit growth outpaced Bajaj Finserv’s by 20x and 22x, respectively. These put Cholamandalam—the financial services arm of diversified business conglomerate Murugappa Group—right at the top of the sector. They also helped Cholamandalam add 20,397 shareholders since June 2021—a 21% rise in the number of shareholders. On the face of it, the surge suggests that people are buying into the Cholamandalam growth story. But are these numbers as impressive as they are made out to be? On a closer look, they tell a different story, raising questions about Cholamandalam’s apparent success on the bourses. The picture that emerges instead is of a company trying to test its risk appetite—a move that could put its retail investors at risk. Let’s first look at the curious surge in Cholamandalam’s stock. Soaring shares The company’s shares have …
Inadequate bad debt provisioning in the face of declining asset quality has helped the company clock impressive profit growth.
Editor's note: Cholamandalam Investment and Finance Co. is no Bajaj Finserv. Its assets are less than a quarter and its top line a third that of India’s leading non-banking financial company. Yet, in 2021-22, Cholamandalam outperformed the country’s most valued NBFC on two key metrics. Its share price and profit growth outpaced Bajaj Finserv’s by 20x and 22x, respectively. These put Cholamandalam—the financial services arm of diversified business conglomerate Murugappa Group—right at the top of the sector. They also helped Cholamandalam add 20,397 shareholders since June 2021—a 21% rise in the number of shareholders. On the face of it, the surge suggests that people are buying into the Cholamandalam growth story. But are these numbers as impressive as they are made out to be? On a closer look, they tell a different story, raising questions about Cholamandalam’s apparent success on the bourses. The picture that emerges instead is of a company trying to test its risk appetite—a move that could put its retail investors at risk. Let’s first look at the curious surge in Cholamandalam’s stock. Soaring shares The company’s shares have …
Atanu Chakraborty’s resignation does not appear as damaging as the bank’s response to it. The ‘all is well’ narrative needs an independent audit.
The increasing convergence of sales and service functions, with consequent non-stop pressure to meet targets, has seen employees jump ship in droves. This has the potential to adversely impact the financial institutions’ health.
The bank, following its March 2020 bailout, may have gone overboard in its quest for safety. That may soon change as it looks to acquire a microfinance business with the promise of high returns.
Atanu Chakraborty’s resignation does not appear as damaging as the bank’s response to it. The ‘all is well’ narrative needs an independent audit.
The increasing convergence of sales and service functions, with consequent non-stop pressure to meet targets, has seen employees jump ship in droves. This has the potential to adversely impact the financial institutions’ health.
The bank, following its March 2020 bailout, may have gone overboard in its quest for safety. That may soon change as it looks to acquire a microfinance business with the promise of high returns.
