CONTENTS

CHAPTERS PARTICULARS PAGE NO.

CHAPTER-I INTRODUCTION
CHAPTER-II REVIEW OF
LITERATURE
CHAPTER-III PROFILE OF THE
COMPANY
CHAPTER-IV DATA ANALYSIS
AND
INTERPRETATION
CHAPTER-V FINDINGS,
SUGGESTIONS AND
BIBILOGRAPHY
CONCLUSION
 CHAPTER-I
INTRODUTION

1.1 INTRODUCTION
Gold is a comparatively dense, shiny, yellow metal. As an element, gold is quite
resistant to corrosion (by oxygen, but also many other chemicals)Gold is a chemical element
with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny metal and the
most malleable and ductile metal known. In ancient times the value of gold had already been
[Link] took gold to make jeweler and currency. It is a symbol of wealth, beauty
and heritage carrying memories and cultures. However, besides these, gold also makes
significant contributions to a wide range of technologies. Due to its physical features as
corrosion resistance and highly malleable and ductile, gold is being applied in space
exploration, nanoparticle technology, and medicine. Gold is considered by many, to be the
best investment you can make to protect yourselfduring stock market declines and inflation.
In fact, history shows that the performance of gold goes up in times of high inflation.
However, the price of gold also has its highs and lows and you could just as easily losemoney
investing in gold as with any other investment.

Gold holds a unique place in the cultural and economic fabric of Kerala, often seen as
a symbol of wealth, prosperity, and social status. The investment behavior surrounding gold
in Kerala is deeply rooted in tradition, yet it is influenced by modern economic factors and
global market trends. Understanding the intricacies of gold investment behavior in this region
requires an exploration of both historical contexts and contemporary dynamics.

In Kerala, gold is not only an investment commodity but also an integral part of social
customs and traditions, particularly in the form of jewelry given during weddings and other
significant life events. This dual role of gold-as a cultural artifact and a financial asset—
makes its investment behavior complex and multifaceted. Furthermore, Kerala's economy,
marked by high levels of remittances from its extensive diaspora, contributes to the state's
significant purchasing power and propensity to invest in gold.

The state's gold investment patterns are influenced by various factors, including
sociodemographic characteristics, economic conditions, and psychological motivations.
Sociodemographic factors such as age, income, education, and occupation play crucial roles
in shaping investment preferences. Additionally, economic factors like inflation rates, interest
rates, and currency fluctuations impact the perceived value and attractiveness of gold as an
investment. Psychological factors, including risk aversion, perceived security, and cultural
beliefs, further influence investment decisions.

Gold has long been regarded as a precious metal with intrinsic value, deeply
embedded in the cultural, economic, and financial landscapes across the world. Its appeal
spans centuries, with historical significance as a symbol of wealth, a medium of exchange,
and a safeguard against economic uncertainty. In contemporary times, gold continues to hold
a pivotal role in the investment portfolios of both individual and institutional investors.

The attract of gold as an investable commodity is multifaceted. It is often viewed as a

hedge against inflation, currency fluctuations, and market volatility, providing a sense of
security in uncertain economic conditions. Unlike other assets, gold maintains its value over
time and often appreciates when other investments falter, making it a popular choice during
periods of financial instability.

As an investment, gold offers diverse forms of ownership and trading, from physical
gold like coins and bullion to financial instruments such as exchange-traded funds (ETFs)
and futures contracts. This versatility makes it accessible to a broad range of investors, from
those seeking long-term security to speculators looking for short-term gains.

MARKET CONDITION:
 India is one of the largest markets for gold, and growing affluence is driving growth
in demand. Gold has a central role in the country’s culture, considered a store of value, a
symbol of wealth and status and a fundamental part of many rituals. Among the country’s
rural population, a deep affinity for gold goes hand in hand with practical considerations of
the portability and security of jewelry as an investment.

MARKET DEVELOPMENT:
11 Gold industry has been witnessing growth during the past years. Gold is
considered to be auspicious, particularly in Hindu and Jain cultures. Gold Investments peeks
on festival days like AkshayaTritiya, Pongal, Onam, Ugadi, Durga Puja, GudiPavda,
Baisakhi and KarvaChauth in India.

The government has reduced import duty for Gold (from 12.5% to 7.5%) and the
Indian Government has made hallmarking mandatory for Gold Jewelry because of which
customers have shown high interest in investing in gold.

TYPES OF GOLD INVESTMENTS:

DIGITAL GOLD:

These can be purchased through various apps in denominations starting from 1 gram
onwards.

[Link] ETFS ():

Gold Exchange Traded Funds are traded on stock exchanges just like shares and
primarily feature Physical Gold and stocks of gold mining/refining as the primary underlying
assets. A Demat (Dematerialized) Account is mandatory for investing in Gold ETFs.

2. GOLD MUTUAL FUNDS:

 These are mutual funds managed by various asset management companies (AMCs) that
follow a fund of fund structure and primarily invest in Gold ETFs. You can invest in most
Gold Mutual Funds through the ETMONEY App.

3. SOVEREIGN GOLD BONDS:

These bonds are periodically released by the Reserve Bank of India (RBI) and available
for purchase through leading public and private sector banks. While these bonds are
guaranteed by the Government of India and pegged to the price of gold, they actually do not
have physical gold as an underlying asset.

TOP GOLD FUNDS IN INDIA:

 Axis Gold Fund.
 Aditya Birla Sun Life Gold Fund.
 CanaraRobeco Gold Savings Fund.
 HDFC Gold Fund.
 ICICI Peru Regular Gold Savings Fund.

AXIS MUTUAL FUND:

Axis Mutual Fund is an asset management company in India. It was established in the
year 2009 and has it headquarter in Mumbai. Axis Mutual Fund offers various types of
mutual fund schemes to invest in India, such as equity funds, hybrid funds, debt funds, and
more. Axis Mutual Fund started its operations in 2009 with its first equity scheme, Axis
Equity Fund. In April 2012, Schroders, an asset management company, acquired a 25% stake
in Axis Mutual Fund. In September 2019, Axis Mutual Fund launched an index fund based
on Nifty 100 that is known as Axis Nifty 100 Index fund. On 22 January, 2020, the company
launched ESG fund.
HDFC MUTUAL FUND:

HDFC Mutual fund is mutual fund company, which has been constituted as a trust in
accordance with the provisions of the Indian Trusts Act, 1882. The company has been
registered with SEBI. Its corporate headquarter is in Mumbai, India. HDFC Asset
Management Company Ltd is incorporated under the Companies Act, 1956, on December 10,
1999, and is approved to act as an Asset Management Company for the HDFC Mutual Fund
by SEBI.

HDFC Asset Management Company Limited was founded in December 1999 as a

joint venture between Housing Development Finance Corporation Limited (“HDFC”) and
Standard Life Investments Limited (“Standard Life Investments”).As on 31st March, 2017,
the share of HDFC and Standard Life Investment in the paid-up equity capital of the HDFC
Asset Management Company Limited was 59.99% and 39.99% respectively. In 2003, HDFC
Asset Management Company Limited acquired Zurich Asset ManagementCompany (India)
Private Limited. Further, in December 2013, it acquired the schemes of Morgan Stanley
Mutual Fund.

1.2 NEED OF THE STUDY:

o It allows Investors to grow their wealth and at the same time generate
inflation beating returns.
o Customers also benefit from the power of compounding.
o Furthermore, investments have the potential to meet customers financial
goals, such as purchasing a house, accumulating retirement corpus, and
building an emergency fund, among others.
1.3 SCOPE OF THE STUDY:
 The study on an impact of changing attitude from gold consumption to gold
investment on an Indian economy is conducted to know the various reasons
why the people give priority to gold as an investment rather than other
avenues.
 Gold plays an important role in the Indian’s lifestyle. Such investment creates
a tremendous impact on Indian economy through heap of import, balance of
payment and reserve maintenance.
 In this context the researcher tried to analyze the gold as investment than gold
consumption

1.4 OBJECTIVES OF THE STUDY:

 To identify gold as an investable commodity among customers vTo analyze
customer preference to invest in gold.
 To find the reason for investing in gold.
 To understand the factor that influences customers to invest in gold.
 To find customers opinion about gold is luxury or necessity.

1.5 LIMITATIONS OF THE STUDY:

 The analysis of investment was mainly based on historical data.
 There is no guarantee that what happened in past will continue in the future.
 Storage is the biggest issue in physical gold investment.
 International movements have impact on the price of gold in India.
1.6 STATEMENT OF THE PROBLEM:

In India most of the investors invest in gold in the form of jeweler which involves
various constraints; includes high making charges loss of value, safety issue and
storage/locker charges. The present study creates awareness among investors in investing in
various forms of gold investment.

The demand for gold is driven by a variety of factors including cultural practices,
economic trends, and geopolitical events. In many cultures, gold is not only a form of
investment but also a symbol of social status and a traditional gift during significant life
events. Economically, the metal is perceived as a reliable store of value, especially in markets
with high inflation or depreciating currencies.

RESEARCH METHODOLOGY:

Research is purely and simply the framework and plan for the study that guides the
collection and analysis of data. ‘Analytical research’ technique was adopted in the project.
Analytical research is designed to analyses the facts/information available to make a critical
evaluation.

SAMPLING TECHNIQUE:

Sampling technique used here is convenient sampling techniques.

1.7 SOURCE OF DATA:

 PRIMARY DATA:
Questionnaire method have been used as a tool for a data collection in
this research.
 SECONDARY DATA:
The secondary data for the study was collected from websites, Internet,
magazines and other sources.
STRUCTURE OF QUESTIONNAIRE:

In this structure of questionnaire, we can used for:

 Descriptive questions
 Suggestion questions
 General questions
 Linear scale question

SIGNIFICANCE OF THE STUDY

The significance of this study lies in its potential to provide comprehensive insights
into gold investment behavior among diverse customer segments. By examining the
relationship between the percentage of income invested and preferred investment periods, the
research can uncover patterns that may guide investors in optimizing their investment
strategies. Understanding the major factors that influence customers to buy and invest in gold
can help financial advisors tailor their advice and products to better meet client needs.
Furthermore, 4 exploring the impact of socio-demographic factors on investment satisfaction
can inform policymakers and financial institutions on how to address the varying preferences
and concerns of different demographic groups. This study not only contributes to academic
knowledge but also has practical implications for enhancing the effectiveness of investment
guidance, fostering more informed decision-making, and ultimately supporting the financial
well-being of investors.

Sample Size

The sample size is 100.

Sampling Techniques

Convenience sampling technique is used to select the samples.

Tool of Data Collection

The tool used to collect data from the respondents is a well-structured questionnaire.

Tools of Data Analysis

The collected data were analyzed with the help of statistical tools like percentage,
weighted mean, chi – square test, Anova, t-test, etc.

Tools of Presentation

The data were presented through certain graphs, tables, charts etc.
CHAPTER SCHEME

CHAPTER-I

The first chapter deals with introduction objectives of the study methodology,

limitedetc.

CHAPTER-II

The second chapter deals with concept of recruitment and selection procedures
and

review of literature of the study.

CHAPTER-III

The third chapter deals with company profile.

CHAPTER-IV

The fourth chapter deals with analysis and interpretation of the data.

CHAPTER-V

The last chapter deals with finding, suggestions and conclusion of the study.
 CHAPTER- 2

REVIEW OF LITERATURE

REVIEW OF LITERATURE

Graham (2001)
 Found the existence of short-term interaction and long-term equilibrium gold prices
and stock prices. Accordingly, there is no long run relationship between the gold price and
stock price but in short run stock price affect gold price.

GidwaniDevika (2002)

In her paper titled “Branded Gold Jewelry Market in India” mentioned that there is
definitely a market for branded jewelry especially if something is aimed at the younger
generation, which wants to buy fashionable real jewelry. This is the right time to get into the
marked as it has just started to take off.

Sampath Kumar. R (2003)

Pointed out in his study that a majority of consumers nowadays are highly
enlightened with the quality of products. In majority of the cases, companies try to get the
consumers loyalty.

Kannan et al. (2003)

Studied the various factors affecting demand for gold in India and concluded that gold
has inverse relationship with its price and is positively related with income further they also
found that financial wealth induced by medium term trends in equity prices has a positive
impact on gold and real yield on government bonds have inverse relationship with gold
demand.

Bhandari, Vandana (2004)

 She reveals that India has multiple languages and multiple traditions of Indian
customs, costumes, textiles and jewelry. She focused his theses in the state of Rajasthan
which mostly celebrated all the traditional Indian festivals in Indian costumes his details
study of the complex role played by clothing, wearing of ornaments and jewelry in Indian
economy. She studied various aspects of jewelry and the various times the same is used by
the people. She analyzed that jewelry is mostly used and warned at the time of marriage
functions to show the status in the society.

Mathur, Asha Rani (2007)

She identified the role of diamond and jewelry in creation of wealth diamond and
jewelry play a major role in wealth creation as volume wise the same is very less but on the
payment terms it is extremely on a higher side this helps to preserve wealth and if required
offload and encased 16 wealth in parts as required from time to time. Mathur’s study is a
reflection of diamond and jewelry in India.

Mishra P.K. et al (2010)

Examined the gold price volatility and the causality between domestic gold prices and
stock prices returns in India for the 1991 to 2009. They conclude that there exists long run
equilibrium relation between gold prices and stock market returns in India.

Tim Pullen et al (2011)

Explored the diversifying, hedging and safe haven properties of gold bullion,
goldstocksgold mutual funds and gold ETFs. The study found gold bullion to have a strong
hedging role over a mere diversifying capability. The gold stocks, gold mutual funds and
gold ETFs tend to be diversifiers. Another finding was that both gold bullion and gold ETFs
show support for the safe haven property.

Suresh (2011)
 A similar study noted the Indian's attitude to gold has changed (more than a status
symbol) but given the ever-increasing price, demand for gold has still not plummeted and a
comparative analysis of what variables influence the demand for gold in people pursuing real
income and investment in gold had also been carried out. The findings were that the demand
for gold is the consequence of investment, people's desire for net wealth and the significant
socio-economic and cultural patterns.

BeyersBosman (2011)

Argues that the advent of gold ETFs does take away some of the unique appeal that
gold stocks previously held. The gold ETFs are a different type of investment from gold
stocks, whereas gold ETFs appear to have more investment appeal.

The findings suggest that the impact of gold ETFs on analysts’ recommendations is
substantial and investing in gold ETFs can be an attractive alternative way of participating in
gold price movements with lower risk than gold stocks.

Fons Bok (2012)

Explored to find if there is a better risk-return trade-off than a physical backed gold
ETF compared to other precious metal ETFs and if there is another precious metal than gold
that could be considered as a safe haven.

Rabi N. Mishra and G. Jagan Mohan (2012)

Concluded that domestic gold prices and international gold prices were closely
interlinked. Variations in the 17 international gold prices find almost similar echo in the
domestic gold prices. Empirical analysis of the study also suggests that the factors affecting
data generating process of the international gold prices has undergone a structural shift in
2003. In the pre-2003 period, macro fundamental such as international commodity prices.

Priyanka Jain (2012)

 It statesEquity shares has low return but high capital appreciation, risk liquidity,
Marketability, tax benefit, Debentures has high return but low risk liquidity and
marketability.

World Gold Council (2013)

Studied how gold can reduce portfolio drawdown for investors with emerging-market
allocations relative to a foreign-exchange hedge. The research found gold as a discrete
allocation increases risk adjusted returns by lowering volatility, not merely because gold has
been in a rising price environment, but because global crises have garnered a greater response
from gold than before.

Vipin Kumar Aggarwal et al., 2013

Demonstrated that the gold ETFs have lesser variability as compared to the physical
gold and concluded that the performance of gold ETFs is better than the performance of
physical gold.

Jalpa, SheenaGogiaVatsala (2013)

He has conducted an empirical study on gold investment rage among the

professionals with a comparative analysis of gold, gold ETF and gold funds with an objective
to study the most preferred metal for investment from gold, silver and platinum, to know the
attitude towards investment in gold and other gold options risk associated and returns in gold
investment. He concluded that family members and friend play an important role in
investment decision and Risk and return perspective of gold ETF is considered as moderate
in the ratings as compared to E-Gold and Gold funds.

Ragavendra RH (2013)
 He has undertaken a comparative study on investing in gold related assets like Gold
ETF, Gold mutual fund and physical gold. The results concluded that there is a significant
difference among the Gold ETFs, Gold Mutual Funds and physical gold. The statistics shows
that return of Gold ETFs is higher than physical form of gold and also Gold Mutual Funds.

Nishad Nawaz M. &Satindra V. R. (2013)

He has undertaken a study on various forms of gold investment with an objective to

study the awareness level and various 18 options for investors for gold investment, to study
the pros and cons of various forms of gold investment and to assist in creating awareness
among investors. The results revealed that majority of the respondents prefer investing in
jewelry and the awareness is very low in case of e gold, gold certificates etc. Respondents
invest or purchase in Jewelry due to convenience and constraint being making charge.

MohamedSaleem and Matloobullahkhan (2013)

In their article “The overview of gold ETFS and its various positive features”, they
try to explain comparative study of gold ETFSs v/s Physical gold and it also give focus on
Gold ETFs as a strong and attractive investment option for the investor. Gold ETFs gives
extra leverage to its users in terms of the profit.

Manoj Kumar (2013)

Employment of funds on assets with the aim of earning income or capital

appreciation is called as investment. The investor with excess cash can invest in securities
like real estate, gold, bank deposits etc.

[Link]&Ms. R. Bhuvaneswari (2014)

 In their research paper” A Study on Investment Pattern Investors of Jewelry at
Pattukkottai Town” Observed the investment pattern of investors in jewelry and the
investment decisions are driven by number of factors such as income of the family, economic
conditions, tax considerations. The study concluded that the investors are ready to invest in
the long term and less risky product because they are aware about consequences of short-
term investment plan.

Rajeshwari Jain (2014)

Investment is the consumption and saving opportunity in future expressed in

monetary terms. Two classes of investments like Fixed income statements i.e. Preference
shares, Bonds, fixed deposits and Variable income investment i.e. equality capital,
proprietary ownership.

Shah (2014)

Concluded that the portfolio risk, rather than being in one form, would be lower and
the returns would be higher if the investment is diversified in various forms. Gold genuinely
enhances wealth for investors and investors are free to always consider gold and silver in the
short-and long-term future of investment as an asset class. Moreover, another study had
similar results

Shobha (2017)

Indicated that gold investment risk is lower compared to stocks and tickets because
daily volatility is lower in gold prices than daily stock and ticket 19 volatility. The finding
also showed no importance of education skills as a variable for investors when they decide to
invest in gold or not. Whereas, another study found that in the short-run period, there is a
unidirectional relationship between Sensex return to gold price return.
Selvan& Ram Raj (2020)

The international market has associated articles relating to the factors influencing investment
decisions on gold. Despite the popularity of gold in Nepal, very few research works have
been conducted in Nepal relating to the gold market. This research, however, discusses the
scenario gap that currently exists and describes the factors influencing investment on gold
and the effect of moderating variables on gold investment decisionsgo to the luxury.

Graham (2001)

Discovered that gold and stock prices have short-term interaction and long- term
equilibrium. As a result, there is no long- term relationship between gold and stock prices,
although stock prices affect gold prices in the near term.

GidwaniDevika (2002)

Stated that there is clearly a market for branded jewelry, particularly if it is geared at
the younger generation who wants to acquire fashionable real jewelry. This is an excellent
time to enter the market, as it has just recently begun to take off.

Fons Bok (2012)

Investigated if a physical backed gold ETF offers a better risk- return trade-off than
other precious metal ETFs, and whether there is another precious metal other than gold that
might be called a safe haven.
Kumar, Manoj (2013)

Investment is the process of putting money into assets with the goal of making money
or increasing the value of the asset. An investor with extra funds can put it into assets such as
real estate, gold, bank accounts, and so on.
 CHAPTER-III

PROFILE OF THE COMPANY

 HISTORY OF THE COMPANY:

Founded in 1978, Cholamandalam (Chola) is the financial services arm of the Murugappa
Group, one of India’s most respected business conglomerates (est. 1900). Headquartered in Chennai,
the company has evolved from a small equipment financing unit into a comprehensive Non-Banking
Financial Company (NBFC).
Parentage: Murugappa Group (interests in engineering, cycles, sugar, and fertilizers).
Philosophy: "The fundamental principle of economic activity is that if no man you transact with
shall lose, then you shall not."

2. Business Segments: The Core Pillars:

Chola operates through a diversified lending model. As of FY26, the revenue mix is led by its
legacy vehicle finance business, followed by aggressive growth in newer segments:
Vehicle Finance (VF): The largest segment (~58-60% of AUM), providing loans for
commercial vehicles, passenger cars, tractors, and two-wheelers.
Loan Against Property (LAP): Targeted at SMEs and self-employed individuals for business
expansion.
Home Loans: Focused on affordable housing and mid-market segments.
 New Segments: Consumer & Small Enterprise Loans (CSEL), SME Loans, and the recently
launched Gold Loan business.

3. Financial Performance (2025-2026):

Chola has maintained a high-growth trajectory. For Q3 FY2025-26, the company reported:
Total Revenue: ₹8,009.28 crore (a 17.13% YoY jump).
Profit After Tax (PAT): ₹1,289.97 crore.
Assets Under Management (AUM): Crossed the ₹2.07 lakh crore mark (as of mid-2025).
Return on Equity (ROE): Consistently holding between 18% and 22%, reflecting strong capital
efficiency.
4. Pan-India Presence and Infrastructure:

Chola’s strength lies in its "Deep Rural" reach. Unlike many urban-centric banks, Chola
focuses on tier-II, tier-III, and tier-IV towns.
Branch Network: Over 1,750 branches nationwide.
Customer Base: Over 4.4 million active customers. Workforce: A massive team of 71,000+
employees, many of whom are locally recruited to ensure cultural alignment with rural borrowers.
5. Leadership and Governance:

The company is led by seasoned veterans of the Indian financial landscape:

Executive Chairman: Vellayan Subbiah (term extended to March 2030).
Managing Director: Ravindra Kumar Kundu (appointed in late 2024).
Credit Rating: Maintains high ratings (e.g., CARE AA+ or equivalent) which allows the company to
borrow at competitive rates from the market.
6. Digital Transformation:

Chola has transitioned from "paper-heavy" to "Phygital" (Physical + Digital).

Paperless Sourcing: Most SME and consumer loans are now processed via digital apps.
Fintech Integration: Through its subsidiary Payswiff, Chola offers omni-channel payment
solutions (mPOS and POS) to its merchant customers, creating a closed-loop financial ecosystem.

7. Key Subsidiaries:

The company operates several arms to provide a holistic financial suite:

Chola Securities (CSEC): Wealth management and stockbroking.
Chola Home Finance: Dedicated to the housing sector.
Payswiff Technologies: Payment gateway and e-commerce solutions.
8. Asset Quality and Risk Management:

Despite its focus on the "unbanked" segment, Chola maintains disciplined risk controls:
GNPA (Gross Non-Performing Assets): Consistently managed around 2.8% to 3.0%.
Capital Adequacy Ratio (CAR): Stood at 19.96% (as of June 2025), well above the regulatory
requirement of 15%, providing a solid buffer for future growth.

9. Corporate Social Responsibility (CSR):

Chola executes its social mandate primarily through the AMM Foundation. Key initiatives include:
Raahi Program: Focuses on eye health for truck drivers (vital for its vehicle finance ecosystem).
Education: "My Dream Scholarship" for children of commercial vehicle crew members.
Environment: Large-scale afforestation and water harvesting projects.

10. Future Strategic Outlook:

Moving into the latter half of 2026, Chola is focusing on:
Diversification: Reducing reliance on the cyclical vehicle finance sector by scaling Gold Loans
and SME lending.
Market Position: Aiming to become a "full-service financial supermarket" for the rural and
semi-urban Indian population.
Growth Target: Aiming for a steady 20-25% CAGR in AUM.

11. Financial Growth Trajectory (2023–2026):

Chola has demonstrated a "high-growth, high-margin" profile. The following table highlights
the steady expansion of their Assets Under Management (AUM) and profitability.

Key Financial Metrics

Financial year AUM ((₹ Total Revenue ((₹ Cr) PAT ((₹ Cr) ROE(%)
Crore)

FY 2022-23 1,12,782 12,974 2,666 20.5%

FY 2023-24 1,53,718 18,909 3,423 19.7%

FY 2024-25 1,88,157 33,196 3,421* 18.5%

FY 2025-26 (Proj) ~2,10,000+ + ~37,000+ + ~4,000+ ~19.0%

Note: While AUM grew significantly in FY25, PAT growth slowed slightly due to higher credit costs
and increased provisioning in the vehicle finance segment.

12. Segmented Portfolio Mix:

As of Q3 FY26, Chola has successfully reduced its reliance on its traditional "engine" (Vehicle
Finance) by scaling newer, high-yielding segments.
Vehicle Finance (54%): Remains the core, with a shift toward Used Commercial Vehicles
(UCV) and Three-Wheelers (EV) to maintain yields.
Loan Against Property & SME (27%): Focused on the MSME sector, which has seen robust
recovery post-2024.
Home Loans (10%): Primarily Affordable Housing in Tier-II and Tier-III cities.
New Businesses (9%): Includes Consumer Loans (CSEL) and Gold Loans—the fastest-growing sub-
sector in 2025.

13. SWOT Analysis (2026 Outlook):

Strength
Murugappa Pedigree: Strong governance and a "clean" market reputation allow for lower cost
of funds.
Distribution Depth: Presence in over 1,750+ locations, with 80% of branches in rural or semi-
urban areas.
Agile Technology: Implementation of AI-driven credit scoring has reduced turnaround time
(TAT) for repeat customers to under 4 hours.
Weaknesses
Geographic Concentration: Approximately 60–65% of revenue still originates from five key
states in South and West India.
Operating Expenses: Expanding into Gold Loans and Consumer Lending has kept the Cost-to-
Income ratio high (~3.1% of managed assets).
Opportunities
EV Financing: As India’s EV penetration grows, Chola’s early partnerships with EV
manufacturers position it as a leader in "Green Financing."
Cross-Selling: Using the Payswiff acquisition to offer payment solutions to its 4.4 million existing
borrowers.
Threats
Asset Quality Stress: Recent upticks in Gross Stage 3 (GS3) assets in the Vehicle Finance
segment (currently ~3.0%) require vigilant monitoring.
Cost of Borrowing: Volatile interest rate environments can squeeze Net Interest Margins (NIM) if the
company cannot pass on costs to rural borrowers quickly.
14. Investor & Stakeholder Impact:

Dividend Track Record: Chola has a consistent history of rewarding shareholders, with a
dividend payout ratio maintained at approximately 15%.
Credit Ratings: Reaffirmed CARE AA+ (Stable) and ICRA AA+ (Positive) as of late 2025,
signaling high safety for debt investors.

15. Risk Management Framework:

As of 2026, Chola has shifted from traditional credit monitoring to a data-first risk architecture.
This is critical as they expand into unsecured consumer segments.
Gen-4 Underwriting: Chola uses AI-driven "Gen-4" scoring models that analyze over 1,500
variables (including satellite data for crop patterns in tractor loans and digital transaction history for
SME loans) to predict defaults before they happen.
 Liquidity Management: The company maintains a "Liquidity Coverage Ratio" (LCR) well
above the regulatory 100%, ensuring it can survive a 30-day market freeze. As of Dec 2025, they held
approximately ₹17,000+ crore in cash and liquid investments.
Asset Quality Guardrails: * GS3 (Gross Stage 3): Managed at 3.36% (Q3 FY26), with a goal to
bring it back under 3.0% by the end of the fiscal year.
Tier-1 Capital: Maintained at a healthy 14.2% to absorb potential shocks in the vehicle finance
market.
Partnership De-risking: In late 2025, Chola actively exited "sub-par" fintech partnerships that
showed high delinquency, choosing to focus on their in-house digital sourcing platform.

[Link] "Phygital" Roadmap (2026 and Beyond):

Chola's "10-Page" story concludes with its vision for the future—the Super App integration.
Direct-to-Customer (D2C): Moving away from dealer-led sourcing to direct customer
acquisition via the Chola mobile app.
Sustainability (ESG): Actively increasing "Green Financing" for Electric Three-Wheelers and
Small Commercial Vehicles (e-SCVs).
Gold Loan Pivot: Scaling the Gold Loan business to ₹10,000+ crore AUM to provide a high-
liquidity counter-balance to the vehicle portfolio.