Shadow lender Cholamandalam to sell largest India perpetual bonds by a non-bank

The company plans to seek bids for the issuance as early as next week.

Cholamandalam Investment and Finance Co., one of India’s biggest shadow lenders, plans to raise as much as ₹20 billion ($209 million) through the issuance of perpetual bonds, according to people familiar with the matter, the largest such debt sale by a private financier in the country.

Perpetual bonds typically don’t have a maturity date and in the case of Cholamandalam’s notes they are callable by the issuer after 10 years, the people said, asking not to be identified as the terms are not public.

The company plans to seek bids for the issuance as early as next week, they said, adding that the coupon rate and other details have yet to be finalized. If completed, Cholamandalam’s bond sale would match the largest ever perpetual debt sold by an Indian financier, with state-run REC Ltd. raising ₹20 billion via such a bond in April 2023.

Cholamandalam didn’t immediately respond to an email and phone calls seeking comment. 

The bond sale would help spur India’s market for perpetual bonds where issuances by non-bank firms have slumped 90 per cent to ₹4.6 billion so far this year, according to data compiled by Bloomberg. 

Few banks and shadow lenders in India are able to issue perpetual bonds due to the high risk they pose for investors. Under India’s regulations, a company isn’t liable to service the debt if its capitalization falls under the minimum required, and it must obtain regulatory approval to repay the bonds in the event of a loss.

Cholamandalam is among the top five non-bank finance companies in India with a market capitalization of ₹1.6 trillion . The planned perpetual bond sale will help the Chennai-based firm boost its capital buffer to keep its double-digit credit growth. The company’s loans grew 22 per cent in the three months to June from a year ago, and its profit jumped 46 per cent to ₹16.5 billion .

Published on August 25, 2026