Cholamandalam Investment and Finance Company, which is rapidly growing its mortgage and gold loan businesses, expects the share of its vehicle finance business in its overall assets to fall below 50% over the next 2–3 years.
“Vehicle Finance (in overall AUM) will drop to let’s say closer to 50% or even marginally lower than 50% and the mortgage loans will improve from around 29% to 33% types,” said Arul Selvan, Chief Financial Officer at Cholamandalam Investment & Finance Company.
Cholamandalam Financial’s business assets under management (AUM) grew 22% year-on-year to ₹2.34 lakh crore, with vehicle finance currently accounting for about 53% of the loan book. The vehicle finance portfolio was as high as 78% of the overall book three to four years ago, and the company had indicated its plan to bring it below 50% by scaling up its mortgage business.
Selvan, however, clarified that vehicle finance disbursements continue to remain robust and that the change in the asset mix will be driven by even faster growth in mortgage loans. Commercial vehicles, for instance, are showing good traction, he said.
“It’s been almost six years since BSVI (emission norms) was introduced. That cycle of replacement is coming into play. We expect a new CV growth to be good,” he said.
Mortgage and Gold Loan
Assets under the mortgage business, comprising loan against property (LAP) and home loans, grew strongly during the quarter. The LAP portfolio expanded 23% to ₹54,130 crore, while home loans grew 22% to ₹23,644 crore.
‘The mortgages will grow faster because of two reasons. One is they are growing well and also because it is a longer tenure product they stay on the books for a longer term,” Selvan said.
Cholamandalam Finance also entered the gold loan business in April 2025 as part of its asset diversification strategy. Its gold loan portfolio has already grown to ₹2,143 crore from ₹97 crore in the corresponding quarter last year. Selvan said the gold loan book is expected to double from the current level, supported by branch expansion.
FY27 Growth Guidance
At the overall level, Chola Finance has guided for 20-23% growth in assets under management for FY27. Selvan said the company would retain the guidance until the end of the second quarter, when the impact of monsoon seasonality, the inauspicious period for new vehicle purchases, and its likely effect on transportation activity become clearer.
The company had earlier made a ₹200 crore provision towards the West Asia crisis. Selvan said the conflict and the consequent increase in diesel prices have not affected its portfolio.
“Both in terms of disbursement as well as collection, the downturn has not been as much as feared,” he said, adding that the NBFC does not intend to reverse the provision in a hurry and would instead wait until the end of the financial year before taking a call.
Selvan also said the company does not foresee any adverse impact from a below-normal monsoon due to El Niño, as the rainfall deficit has narrowed from more than 40% to less than 15% currently.