Why did Cholamandalam Investment shares jump 8% despite Cobrapost’s Governance allegations?

Synopsis: Cholamandalam Investment and Finance rises 8% after clarification on Cobrapost allegations, calling them baseless. It stated all cash collections, KYC, tax compliance, and related-party transactions are lawful, reaffirmed business guidance, and assured continued transparency and regulatory adherence.

This is one of the premier diversified non-banking finance companies in India, engaged in providing vehicle finance, home loans and Loan against property is now in the focus after the company clarifies on Cobrapost report.

With a market capitalisation of Rs. 1,43,835 cr, the shares of Cholamandalam Investment & Finance Company Ltd are currently trading at Rs. 1,704 per share, jumping 8% in today’s market session, making a high of Rs. 1,713, from its previous close of Rs. 1,584.75 per share.

Cobrapost Allegations on the company

Shares of Cholamandalam Investment and Finance Company fell up to 6% in the last two trading session. The fall came after Cobrapost published a report alleging corporate governance lapses, including Rs. 10,262 crore in related-party transactions with Murugappa Group entities, Rs. 25,089 crore in cash deposits over five years, rising auditors fees, non-disclosure of related-party dealings, and high payments to Murugappa family members and credit rating agencies. 

The report also raised concerns over Chola MS Insurance, citing Rs. 942 crore in commission income between FY24 and FY25 and claiming non-compliance in disclosures.

Cholamandalam Responds to Cobrapost Allegations

Cholamandalam Investment and Finance Company has strongly refuted the Cobrapost report, calling the allegations “malicious and baseless” with ulterior motives. The company clarified that all KYC and income tax compliance for large cash collections have been conducted in accordance with legal norms. It emphasized that its business primarily serves small road transport operators, whose earnings and EMIs are often in cash, and all such cash collections are promptly deposited in banks.

The company also stated that all related-party transactions are fully disclosed in its financial statements, and all payments to board members, key management personnel, and senior management personnel are made in compliance with applicable laws. 

Cholamandalam confirmed there is no revision in its business guidance and assured investors that it will continue to operate according to its board-approved business plan, maintaining transparency and adherence to legal and regulatory standards.

About the company 

Cholamandalam Investment & Finance Company Ltd (Chola) is a leading non-banking financial company (NBFC) in India and a part of the Murugappa Group. The company offers a wide range of financial services, including vehicle finance, home loans, loans against property, SME loans, and consumer finance.

The company reported strong year-on-year financial performance for the quarter ended Q2FY26. Sales rose by about 20% to Rs. 7,491 crore from Rs. 6,255 crore in Q1FY26, while EBITDA increased by nearly 15% to Rs. 5,031 crore compared to Rs. 4,358 crore a year ago. 

Net profit grew by around 20% to Rs. 1,160 crore from Rs. 968 crore, supported by healthy operating performance. Earnings per share (EPS) also improved by close to 20%, rising to Rs. 13.78 from Rs. 11.52.

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