Sundaram Finance to unlock value

Sundaram Finance (SFL) is planning to demerge its non-financial services investments into a wholly-owned subsidiary, Sundaram Finance Investments (SFIL).

SFIL will be the holding company for all non-financial services investments of SFL and will be listed on the Exchanges. The date of demerger execution has been set as April 1, 2016.

SFL shareholders will receive one share of SFIL for every share held in SFL as on the record date. As promoter, SFL would hold 26.47 per cent stake in SFIL and the rest 73.53 per cent will be issued to all shareholders of SFL. The company is confident enough that, post-demerger, SFL’s balance sheet and capital adequacy will remain robust and it will continue to seek growth opportunities in the financial services landscape.

SFL has some of the important investments including listed companies such as Sundaram Clayton, Wheels India and India Motor Parts & Accessories (IMPAL) and unlisted companies such as Brakes India and Turbo Energy. The cumulative investment in these companies in book value terms has grown to over Rs 150 crore in 2016 from Rs 23 crore in 2006 and yielded a cumulative dividend of Rs 199 crore in the last five years.