about sundaram finance ltd

7/28/2019 About Sundaram Finance Ltd

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ABOUT SUNDARAM FINANCE Ltd.

Sundaram Finance( SF ) is a leading Non Banking Finance Company ( NBFC ) in India SundaramFinance has grown over the past decades on the foundations of dedicated customer service, fair businesspractices, efficient, safe and trusted financial policies.

Strong Values

Faith. Depositor Confidence. Institutional Trust. Investor Steadfastness. Employee loyalty. These five pillarssupport the strong edifice of Sundaram Finance. An edifice built in 1954, when Shri T.S.Santhanamenvisioned the future of Hire-purchase Finance in India. Sundaram Finance was promoted by MadrasMotor Insurance Company, a part of the reputed TVS Group.

A visionary ahead of his times, Shri Santhanam identified the opportunities that arose as a fledgling nationembarked on the path of development, anticipating the important role the finance industry would play in theemerging market scenario in the country. It was his foresight and entrepreneurial instincts, which laid thefoundations of Sundaram Finance. Foundations that would ensure a secure future.

Reaching OutDriven by the sincerity of Shri Santhanams concern for commitment to and passion for the small truckoperators, at a time when the focus was only on financing large truck operators, Sundaram Financeemerged as a leading financier of the transport sector. Devoting its services to the growth of the roadtransport industry, Sundaram Finance is today synonymous with automotive financing in the country.

Today, Sundaram Finance has a nationwide network supported by a dedicated team of service orientedpersonnel, who ensure personalized customer service. Sundaram Finance remains true to its core valuesof prudence, fairness, transparency and service excellence which have enabled it to emerge as a leader inits chosen field.

Dedicated Service

At Sundaram Finance, values are defined by the services rendered to the customer.

Long before customer satisfaction became a fashionable concept, Sundaram Finance distinguished itselfby providing a host of value-added services which transcend the ordinary approach.


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Integrity

From being the leader in hire-purchase, Sundaram Finance has spread its activities and today its range offinancial services encompasses Leasing and Car Finance. Sundaram Finance also offers Home Financeand Asset Management through its subsidiaries.

DepositsSundaram Finance offers attractive schemes to all its depositors. In fact, many of the depositors have arelationship with the company which spreads over three generations and view Sundaram Finance assynonymous with safety, security and service.

The company has been rated MAAA by ICRA signifying highest safety.

Leasing

Sundaram Finance diversified into leasing in 1981, when leasing was still in its conceptual stages in thecountry. Pioneering the growth of leasing with its flexible, cost-effective and tailor-made leases, SundaramFinance, today counts among its clientele some of the most reputed blue chip companies. SundaramFinance has a diversified portfolio ranging from computers to aircraft.

Car Finance

Economic liberalization saw the entry of many foreign car manufacturers in the country. Realising the highgrowth potential of the car market, Sundaram Finance launched Sundaram Car Finance exclusively tofinance cars and utility vehicles. Supported by a large countrywide network, strong dealer relationship andits customised service, Sundaram Finance has attained a position of strength in its area, servicing a verylarge customer base.

Prudence & Vision

Sundaram Finance achieved its leadership position by a unique combination of traditional conservatismand judicious dynamism. The values envisioned and inculcated by Shri T.S.Santhanam have endured and

inspired the professional workforce at Sundaram Finance to a very high degree of commitment anddedication. The prudent practices followed by the Company such as strong credit appraisal skills, effectivereceivables management, well defined documentation and procedures have become industry benchmarks.

At Sundaram Finance, people are its most valuable assets. The Company conducts regular in-housetraining programmes that help motivate employees and improve leadership and managerial abilities. Everyemployee at Sundaram Finance is proud to represent an institution that values professional integrity, aboveall else.

Sundaram Finance not only invests in its people but also in the latest advanced state-of-the-art technology.It set industry standards by computerising and networking all its offices through a variety of communicationmedia including VSAT installations. These ensure efficient and smooth functioning of all its systems and

procedures resulting in better customer service.


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Secure Future

Be it lenders, depositors, shareholders, customers or employees, Sundaram Finance has always enjoyedan excellent relationship with all its stakeholders. In fact, the Company owes its impressive track record tothese long standing relationships. Today, Sundaram Finance has come a long way from its position ofbeing the leading Hire-purchase Finance Company to become the leader in its chosen field.

Committed to Society

Sundaram Medical Foundation (SMF), a non-profit Trust set up in 1990, exemplifies the commitment ofSundaram Finance Group to the community and its citizens. Dedicated to setting new standards in qualityhealthcare to the community in a cost-effective manner without compromising on patient care, medicalcompetence, service courteousness and compassion, Dr. Rangarajan Memorial Hospital is a hospital underSMF, where caring is not a sub-speciality in medicine.

Endowed with a large corpus Fund, the hospital is today, equipped with up-to-date medical infrastructureand provides a wide range of medical services fulfilling a long felt need for providing quality healthcare ataffordable costs.

Main Building Annex

Sundaram Medical Foundation, Sundaram Medical Foundation,

Shanthi Colony 4th Avenue, 783/784, 17th Main Road, Tirumangalam,

Anna Nagar, Anna Nagar,

Chennai 600 040. Chennai 600 040.

Ph: 044 2626 8844Ph: 044 2622 0103 / 2622 0104 / 2622 0105 /2622 0106

HISTORY:

Sundaram Finance (SFL) was promoted by Madras Motor Insurance Company, a part of the reputed TVSGroup. The Company was incorporated in 1954. It became a public limited company in 1961 and wentpublic in 1972. The main business of the company includes hire purchase and lease financing ofcommercial vehicles, cars and machinery. It also undertakes short-term activities such as bill discountingand commercial mortgage lending. SFL achieved its leadership position by a unique combination oftraditional conservatism and judicious dynamism. Faith, Depositor Confidence, Institutional Trust, InvestorSteadfastness & Employee loyalty are the five pillars to support the strong edifice of the company.


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It set industry standards by computerising and networking all its offices through a variety of communicationmedia including VSAT installations.These ensure efficient and smooth functioning of all its systems and procedures resulting in bettercustomer service. The company allotted bonus shares in the ratio of 1:1 in Nov. 1995. The subsidiaries ofthe company are Sundaram Home Finance Ltd, Sundaram Asset Management Company Ltd, Royal

Sundaram Alliance Insurance Company Ltd, Sundaram Finance Distribution Ltd, LGF Services Pvt Ltd andSundaram Finance Trustee Company Ltd. As part of diversification and to provided more financial serviceto the customers, the company entered in to various collaboration and joint ventures. It formed an assetmanagement company called Sundaram Newton Asset Management Company Pvt. Ltd. in collaborationwith Newton Management, UK. In housing loan sector it promoted Sundaram Home Finance Limited withequity participation from International Finance Corporation (IFC), Washington, and FMO (NetherlandsDevelopment Finance Company). During 1999-2000, India Equipment Leasing (IEL), Aparajita FinanceCompany (APC), Balika Finance Company (BFC) & Paramjyothi Finance Company (PFC) wereamalgamated with the company. The company paid a total consideration of Rs 20.10 crore for theacquisition of shares of the amalgamating companies. During 2000-2001, Sundaram Finance Services(SFSL) was amalgamated with the company. Subsequently Sundaram Finance Securities (SFSec.)

became a wholly-owned subsidiary of your company. Further during the year it promoted Fiat SundaramAuto Finance Limited, a joint venture with Fidis S.p.A., Italy for financing Fiat cars. Also with the opening upof the insurance sector the company along with Royal & Sun Alliance Insurance plc formed a joint venturecompany named Royal Sundaram Alliance Insurance Company (RSAIC) for non-life insurance business. Itcommenced its operation in March 2001 and offers full range of insurance products including fire, motor,personal accident, home, health, travel and rural insurance. The Company has merged Lakshmi GeneralFinance Ltd (LGF) with itself with effect from 1st April 2004. According to the scheme of merger thecompany has issued 3775965 equity shares of Rs.10/- each to the shareholders of LGF in the ratio of1:1.52. Consequent to this merger the company`s paid up capital increased to Rs.27.78 crores.

COMPANY BACKGROUND:

Industry Name: Finance & Investments

House Name: TVS Group

Face Value: 10.0

ISIN: INE660A01013

Market Lot: 1

Registered Address Registrar

21, Patullos RoadCity:Chennai (Madras)

State:Tamil NaduPincode:600002Email ID:[email protected] Url:http://www.sundaramfinance.in

Cameo Corporate Services Ltd."Subramanian Building",Vth Floor, No.1,Club House RoadCity:Chennai (Madras)State:Tamil NaduPincode:600002Auditor:Brahmayya & Co.,


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Sundaram Finance Limited, which was incorporated in 1954 with the object of financing thepurchase of commercial vehicles and passenger cars, has grown today into one of the mosttrusted financial services groups in India. Today, the activities of the Sundaram FinanceGroup span Commercial Vehicle Finance, Car Finance, Insurance, Asset Management,Home Loans, Equipment Finance, Fleet Card, Infotech Solutions, Business ProcessOutsourcing, Tyre Finance and Logistics Services.

Sundaram Finance has a Nation-wide presence with 561 branches, over 2 lakh depositorsand nearly 100,000 commercial vehicle and car finance customers.


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PRODUCT or SEVICES OFFERED BY INDUSTRY

1) FACTORING:Factoring is a financial transaction whereby a business sells its accounts

receivable (i.e., invoices) to a third party (called a factor) at a discount. In "advance"factoring, the factor provides financing to the seller of the accounts in the form of a cash

"advance," often 80% of the purchase price of the accounts, with the balance of the

purchase price being paid, net of the factor's discount fee (commission) and other charges,

upon collection from the account client. In "maturity" factoring, the factor makes no advance

on the purchased accounts; rather, the purchase price is paid on or about the average

maturity date of the accounts being purchased in the batch. Factoring differs from a bank

loan in several ways. The emphasis is on the value of the receivables (essentially a financial

asset), whereas a bank focuses more on the value of the borrower's total assets, and oftenalso considers, in underwriting the loan, the value attributable to non-accounts collateral

owned by the borrower. Such collateral includes inventory, equipment, and real

property, that is, a bank loan issuer looks beyond the credit-worthiness of the firm's

accounts receivables and of the account debtors (obligors) thereon. Secondly, factoring is

not a loan it is the purchase of a financial asset (the receivable). Third, a nonrecourse

factor assumes the "credit risk that a purchased account will not collect due solely to the

financial inability of account debtor to pay. In the United States, if the factor does not

assume credit risk on the purchased accounts, in most cases a court will recharacterize thetransaction as a secured loan.

2) LEASING:

Leasing is a process by which a firm can obtain the use of a certain fixed assets for which itmust pay a series of contractual, periodic, tax deductible payments.

The lessee is the receiver of the services or the assets under the lease contract and thelessor is the owner of the assets. The relationship between the tenant and the landlord iscalled a tenancy, and can be for a fixed or an indefinite period of time (called the term of thelease). The consideration for the lease is called rent.


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A gross lease is when the tenant pays a flat rental amount and the landlord pays for allproperty charges regularly incurred by the ownership from lawnmowers and washingmachines to handbags and jewelry.

3) FORFIATING:Forfiating is a financial transaction involving the purchase of receivables from exporters by

a forfiater. The forfiater takes on all the risks associated with the receivables but earns a

margin. The forfiater may also be immunized from certain risks if the transaction involves

payment by negotiable instrument. The forfiating is a transaction involving the sale of one of

the firm's transactions.

4) MERCHANT BANKING:

A merchant bank is a financial institution which provides capital to companies in the formof share ownership instead of loans. A merchant bank also provides advisory on corporatematters to the firms they lend to. In the United Kingdom, the term "merchant bank" refers toan investment bank.

Today, according to the U.S. Federal Deposit Insurance Corporation (FDIC), "the termmerchant banking is generally understood to mean negotiated private equity investment byfinancial institutions in the unregistered securities of either privately or publicly held

companies." Both commercial banks and investment banks may engage in merchantbanking activities. Historically, merchant banks' original purpose was to facilitate and/orfinance production and trade of commodities, hence the name "merchant".

5) VENTURE CAPITAL:Venture capital (VC) is financial capital provided to early-stage, high-potential, high

risk, growth startup companies. The venture capital fund makes money by owning equity inthe companies it invests in, which usually have a novel technology or business model inhigh technology industries, such as biotechnology, IT, software, etc.

Venture capital is a subset of private equity. Therefore, all venture capital is private equity,but not all private equity is venture capital.


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Venture capital is attractive for new companies with limited operating history that are toosmall to raise capital in the public markets and have not reached the point where they areable to secure a bank loan or complete a debt offering.

6) SECURITIZATION:Securitizationis a process where NBFC is engaged in hire purchase or installment sale ormortgage business would have many customers who owe them a stream of monthlypayments. Thus, NBFC invest its funds in assets and would charge in built interest rate toits hirers.

All money business is based on two things: Risk & Interest. These NBFCs expertise is toscrutinize the creditworthiness of its prospective hirers/customer and invest funds in them.

Thus, these companies source funds at some rate of interest, load this rate of interest fortheir efforts and risk and pass it on to its customers.

Would there be a point when NBFCs investible funds are fully invested and it has no furtherfunds to invest. Certainly Yes , unless these NBFCs have continuous source of funds, itcannot do unlimited and continuous business. Thus, one of the ways to overcome thesituation is securitization.

7) HIRE PURCHASE:Hire purchase is the legal term for a contract, in which persons usually agree to pay forgoods in parts or a percentage at a time. It was developed in the United Kingdom and cannow be in Australia, China, India, Jamaica, Japan, Malaysia, New Zealand, and South

Africa.

It is also called closed-end leasing. In cases where a buyer cannot afford to pay the askedprice for an item of property as a lump sum but can afford to pay a percentage as a deposit,a hire-purchase contract allows the buyer to hire the goods for a monthly rent. When a sumequal to the original full price plus interest has been paid in equal installments, the buyer

may then exercise an option to buy the goods at a predetermined price or return the goodsto the owner.

8) CREDIT RATING:A credit rating evaluates the credit worthiness of a debtor, especially a business (company)or a government. It is an evaluation made by a credit rating agency of the debtor's ability topay back the debt.


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Credit ratings are determined by credit ratings agencies. The credit rating represents thecredit rating agency's evaluation of qualitative and quantitative information for a company orgovernment; including non-public information obtained by the credit rating agenciesanalysts.

Credit ratings are not based on mathematical formulas. Instead, credit rating agencies usetheir judgment and experience in determining what public and private information should beconsidered in giving a rating to a particular company or government. The credit rating isused by individuals and entities that purchase the bonds issued by companies andgovernments to determine the likelihood that the government will pay its bond obligations.

A poor credit rating indicates a credit rating agency's opinion that the company orgovernment has a high risk of defaulting, based on the agency's analysis of the entity'shistory and analysis of long term economic prospects.

9) DEMAT:In a demat account, shares and securities are held electronically instead of the investortaking physical possession of certificates. A demat account is opened by the investor whileregistering with an investment broker (or sub-broker). The demat account number is quoted

for all transactions to enable electronic settlements of trades to take place.Access to the demat account requires an internet password and a transaction password.Transfers or purchases of securities can then be initiated. Purchases and sales of securitieson the demat account are automatically made once transactions are confirmed andcompleted.


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10) DEPOSITORIES:Depositoriesact as intermediary between issuing company and investors. They manage thesecurities account of investors. It assists in investor related issues. It also helps inimmobilization of physical shares into mobilization in e-form. It also acts as intermediary forIPO. It assists in development of primary and secondary market. Depositories also ensurefungibility of shares.

11) REGISTRAR & SHARE TRANSFER AGENT:Registrar & Share Transfer Agentacts as mediator to transfer the share from one investorto another. They are involved in transfer of shares. They act as underwriter to issue. Theyalso act as a guide for the company and the investor. They help in conversion of physicalshares e-form. They act as intermediary to do registration of shares. They are responsiblefor keeping track of all transactions.


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Products / Services Offered By The company:

Deposits

Car Finance

Commercial Vehicle Finance

Tyre Finance

Tractor Finance

Fleet Card


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DEPOSITS:

The following is the rate of interest offered on deposits held with Sundaram

Finance Ltd.


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CAR FINANCE:

Sundaram Finance is one of the largest and a leading player in the area of car

finance. They extend finance on all makes and models of cars.The vast networkof561branches and experienced field force help customers choose the vehiclesand the finance package to suit their budget.

The approval is fast and with minimum documentation. In fact customers can driveaway with their dream car in 48 hours flat.

Their car finance schemes are easy to understand and without any hidden costs


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Commercial Vehicle Finance:

Sundaram Finance is one of the oldest and largest providers of finance for theacquisition of commercial vehicles of all makes.

The Commercial vehicle finance provided by them helps the small operators toacquire vehicles with minimum hassle and documentation. They also providecustomised financing options to suit your needs.

The strength of the Group lies in the quick completion of transactions, longassociation with transporters for generations and the intimate knowledge of themarket and its nuances.

Large fleet operators also find it easy to expand their fleet through the financeprovided by SFL.

SFL has a vast network of561branches to cater to the financing needs of ourcustomers. SFL also offer special schemes, supported by the manufacturers, wherethe rates are highly competitive.

TYRE FINANCE: Sundaram Finance offers you an exclusive tyre finance scheme. Thescheme gives you the never-before advantage of solving your temporary financial needs


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TRACTOR FINANCE:

People looking to buy a new tractor and need finance for it, Sundaram Finance is the place.With more than 50 years of being in the business of financing the road transport industry,they now finance tractors, sugarcane harvesters, grain harvesters, and implements. Theirexperienced staff will gladly guide you through every step of buying a new tractor.

The finance schemes are transparent, and flexible to suit your repayment requirements.Attractive interest rates are a key feature of our tractor finance schemes and you can berest assured that there are no hidden costs. Documentation is simple and processing isquick. All this supported by excellent customer service, is sure to make your experience withSundaram Finance, a pleasant one.

A trusted financial services brand, they have a pan-India network of561branches.


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FLEET CARD:

From the trusted house ofSundaram Finance, here is another simple and secure solutionfor managing your fleets fuel needs. Sundaram Finance has a comprehensive fleet card

programme - XTRAPOWER with IndianOil & SmartFleet with Bharat Petroleum.

What is a Fleet Card?

The Fleet Card is an effective fuel management tool that provides customers an efficientway of purchasing auto fuels like diesel, petrol and lubricants. The Fleet Card is anaffordable fuel finance product that offers low cost working capital to monitor and controlyour fleet expenses. It offers a comprehensive customer credit limit, within which one canpreset daily usage limits for each vehicle and derive maximum effectiveness. It also allowsyou to outsource the billing and payment process and thereby helps manage yourpaperwork more efficiently.

What are its features?

Simplicity Value for Money Convenience & Control Security Affordability

Who is eligible for Fleet Card?

If you're a fleet owner, an operator or a corporate, and are in need of an effective tool tomonitor and control your fuel expenses, then the Fleet Card is just what you should belooking for.


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COMPETITION:

The following table shows the performance of Sundaram finance ltd Vs its competitors


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Services offered by the industry Vs services offered by Sundaram Finance:

Services offered by the industry: Services offered by Sundaram finance:

Factoring DepositsLeasing Car FinanceForfiating Commercial Vehicle FinanceMerchant Banking Tyre FinanceVenture Capital Tractor FinanceSecuritization Fleet CardHire Purchase

Credit RatingDemat

DepositoriesRegistrars and transfer agents


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Conclusion: Sundaram finance has been into the business of financing since a long time.

Its into car finance, commercial vehicle finance, tyre finance, tractor finance etc. So,

Sundaram finance can also foray into sectors like Leasing, Hire purchase and also venture

capital. Sundaram finance has a good experience in financing sector so, it can expand its

business by entering into the sectors mentioned above.

NBFCs are gaining momentum in the past few decades with wide variety of products and

services. NBFCs collect public funds and give loan able funds. There has been significant

increase in such companies since 1990s. They are playing a vital role in the development

of financial system of our country. The banking sector is financing only 40 percent and the

rest is by NBFCs and private money lenders. At the same time, 50 percent of the credit

requirement of manufacturing is done by NBFCs. 65 percent of financing of the private

constructions activities is also financed by the NBFCs.

NBFCs in India have become prominent in various activities such as hire purchase, lease

financing, loans, investments and so on. In desperate times, NBFCs could survive, owing to

the aggressive character and customized services. NBFCs are doing more fee based

services than fund based. They are focusing now, on retailing sector- husing finance,

personal loans and marketing of insurance.

about sundaram finance ltd

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