Cholamandalam Investment replies to 5 Cobrapost allegations; MOFSL shares target price
CIFC said it would engage with regulators to assess whether there was any financial or market-manipulation motive behind the report and would consult legal advisers to evaluate appropriate action against Cobrapost.
- Dec 24, 2025,
- Updated Dec 24, 2025 7:47 AM IST
Cholamandalam Investment and Finance Company (CIFC) has categorically denied allegations made by investigative agency Cobrapost, reiterating that the claims were malicious, distorted and lacked any factual or regulatory basis. Cobrapost released its report on December 22, 2025, alleging large-scale related-party transactions, cash handling irregularities, governance lapses and regulatory non-compliance at the NBFC.
CIFC’s management convened an investor call to address concerns raised by investors and the media. During the call, MOFSL said, the management reiterated that the allegations stemmed from selective interpretation of disclosures and misreading of the regulatory framework, and stressed that there was no change to the company’s business strategy, operating performance or guidance. The management reaffirmed confidence in delivering on stated growth, profitability and asset quality targets.
MOFSL said CIFC highlighted its strong capital position, with net worth expected to rise by around Rs 2,500 crore from FY25 levels. This, MOFSL noted, was supported by Rs 300 crore already infused through compulsory convertible debenture (CCD) conversions, with a further Rs 1,700 crore of conversions expected over the next three quarters, which would strengthen capital adequacy.
While the call was primarily convened to address the allegations, the management also indicated that the ongoing quarter has been strong in terms of disbursements across vehicle finance and home loans. CIFC expected the December quarter to mark a turnaround, with the second half of FY26 likely to be seasonally strong.
"CIFC trades at 3.9 times FY27E P/BV, a premium that we believe is well-deserved and likely to sustain. This reflects the company’s consistent focus on navigating vehicle demand cyclicality while sustaining healthy AUM growth and stable asset quality through a well-diversified product mix. We reiterate BUY with a TP of INR 2,000," MOFSL said.
CIFC said it would engage with regulators to assess whether there was any financial or market-manipulation motive behind the report and would consult legal advisers to evaluate appropriate action against Cobrapost and related reporting. Management expressed confidence that regulatory scrutiny would validate its position.
MOFSL said CIFC remained a robust franchise, with the brokerage forecasting around 20 per cent CAGR in assets under management and about 25 per cent CAGR in profit after tax over FY25–28, alongside RoA and RoE of about 2.7 per cent and 20 per cent, respectively, by FY28.
Key allegations and management responses
1) Cobrapost alleged that CIFC had aggregated transactions across multiple years involving group entities such as Murugappa Management Services, Chola Business Services and Chola MS General Insurance, and claimed fund diversion and inadequate disclosure of related-party transactions exceeding Rs 10,000 crore. CIFC’s management rejected these claims, stating that all related-party transactions were disclosed in line with applicable accounting standards and legal requirements, and that the report applied retrospective definitions that were not relevant for earlier years, resulting in misleading aggregates.
2) On allegations of cash deposits of around Rs 25,000 crore across 14 banks over six years, the management said cash collections were inherent to the borrower profile and governed by strong internal controls and audits, adding that cash collections had reduced to about 15 per cent from 50 per cent earlier.
3) Regarding insurance commission income, the management said CIFC offered accident and hospitalisation insurance to borrowers, partnered with multiple insurers, and did not bundle products in violation of regulations.
4) It also rejected concerns around payments to credit rating agencies, stating that fees were market-linked and below peer averages.
5) On CSR-related allegations, management clarified that spending was fully disclosed and structured as work contracts rather than donations to ensure monitoring, measurable outcomes and regulatory compliance.
Cholamandalam Investment and Finance Company (CIFC) has categorically denied allegations made by investigative agency Cobrapost, reiterating that the claims were malicious, distorted and lacked any factual or regulatory basis. Cobrapost released its report on December 22, 2025, alleging large-scale related-party transactions, cash handling irregularities, governance lapses and regulatory non-compliance at the NBFC.
CIFC’s management convened an investor call to address concerns raised by investors and the media. During the call, MOFSL said, the management reiterated that the allegations stemmed from selective interpretation of disclosures and misreading of the regulatory framework, and stressed that there was no change to the company’s business strategy, operating performance or guidance. The management reaffirmed confidence in delivering on stated growth, profitability and asset quality targets.
MOFSL said CIFC highlighted its strong capital position, with net worth expected to rise by around Rs 2,500 crore from FY25 levels. This, MOFSL noted, was supported by Rs 300 crore already infused through compulsory convertible debenture (CCD) conversions, with a further Rs 1,700 crore of conversions expected over the next three quarters, which would strengthen capital adequacy.
While the call was primarily convened to address the allegations, the management also indicated that the ongoing quarter has been strong in terms of disbursements across vehicle finance and home loans. CIFC expected the December quarter to mark a turnaround, with the second half of FY26 likely to be seasonally strong.
"CIFC trades at 3.9 times FY27E P/BV, a premium that we believe is well-deserved and likely to sustain. This reflects the company’s consistent focus on navigating vehicle demand cyclicality while sustaining healthy AUM growth and stable asset quality through a well-diversified product mix. We reiterate BUY with a TP of INR 2,000," MOFSL said.
CIFC said it would engage with regulators to assess whether there was any financial or market-manipulation motive behind the report and would consult legal advisers to evaluate appropriate action against Cobrapost and related reporting. Management expressed confidence that regulatory scrutiny would validate its position.
MOFSL said CIFC remained a robust franchise, with the brokerage forecasting around 20 per cent CAGR in assets under management and about 25 per cent CAGR in profit after tax over FY25–28, alongside RoA and RoE of about 2.7 per cent and 20 per cent, respectively, by FY28.
Key allegations and management responses
1) Cobrapost alleged that CIFC had aggregated transactions across multiple years involving group entities such as Murugappa Management Services, Chola Business Services and Chola MS General Insurance, and claimed fund diversion and inadequate disclosure of related-party transactions exceeding Rs 10,000 crore. CIFC’s management rejected these claims, stating that all related-party transactions were disclosed in line with applicable accounting standards and legal requirements, and that the report applied retrospective definitions that were not relevant for earlier years, resulting in misleading aggregates.
2) On allegations of cash deposits of around Rs 25,000 crore across 14 banks over six years, the management said cash collections were inherent to the borrower profile and governed by strong internal controls and audits, adding that cash collections had reduced to about 15 per cent from 50 per cent earlier.
3) Regarding insurance commission income, the management said CIFC offered accident and hospitalisation insurance to borrowers, partnered with multiple insurers, and did not bundle products in violation of regulations.
4) It also rejected concerns around payments to credit rating agencies, stating that fees were market-linked and below peer averages.
5) On CSR-related allegations, management clarified that spending was fully disclosed and structured as work contracts rather than donations to ensure monitoring, measurable outcomes and regulatory compliance.