Financial company status: a Kochi NBFC
Cheraman Financial Services is a Kerala-based company that lends through equipment leases and invests through equity-linked instruments, and it presents itself as a non-deposit taking NBFC registered with the Reserve Bank of India. Its legal name is Cheraman Financial Services Limited, an unlisted public company incorporated on 30 November 2009 under the corporate identity number U65923KL2009PLC025082. The company register shows its status as active, with a paid-up capital of about INR 33.9 crore against an authorised capital of INR 1,000 crore.
The registered office is on Bypass Road in Ponnurunni, Vyttila, Kochi, in Ernakulam district, Kerala. A non-banking financial company can lend and invest but cannot operate current accounts or issue cheques on itself the way a bank does, and a non-deposit taking NBFC, as the label says, does not accept public deposits. The company’s website carries a disclaimer that the RBI does not guarantee its soundness or the repayment of deposits, which is a standard warning for entities of this type.
Ask the company for its RBI registration number and its NBFC category, and check the current certificate status against the list of NBFCs that the Reserve Bank publishes; that check is simple to do before any commitment is made. Treat the NBFC label as a licence to lend and invest within RBI rules, and nothing more: it is not a sign of quality, and it says nothing about how a particular lease or investment will turn out for you.
Ownership and the Islamic-finance story
Its shareholder base has combined the Kerala State Industrial Development Corporation with private investors, mostly Gulf-based non-resident Keralites, as Salaam Gateway described in January 2017. In July 2013 Gulf Times described the firm as co-promoted by the Kerala government and non-resident Keralites, working on interest-free or Islamic principles, with Rs 150 million set aside for the Startup Village out of a Rs 2.5 billion alternative investment fund, and mentioned RBI approval and SEBI clearance.
These descriptions date from several years ago and should be read as history. The company today speaks of lease and equity finance without a Sharia label. Nobody should assume that its products have been certified, so ask the company whether a Sharia supervisory board exists. Whether a lease or an equity instrument is compliant is a question for a qualified scholar or Sharia adviser, not something that follows from the company’s background.
A note on dates
Salaam Gateway dated the firm’s start to the early 2000s in 2017, but the corporate identity number points to 2009, and 2009 is the date to use. It also said at that time that the company had been reporting losses. Ask the company for its current loan book and profit before relying on any claim about present performance.
Lease finance for business equipment
The core lending product is lease finance. The company says it covers medical equipment, construction equipment, IT hardware, vehicles and manufacturing machinery. It can fund up to 80 percent of the asset value and the tenure can run up to five years. For a clinic buying a diagnostic machine, that structure means the business still has to find the remaining share of the price from its own resources.
Used or refurbished equipment can also be leased, which lowers the entry cost for small firms that cannot afford new machines. In a lease the financier owns the asset and the customer pays rent for its use. Under the Islamic variant known as ijara, ownership may transfer at the end, but the company’s page does not describe such an option, so ask directly what happens to the asset when the lease ends.
How the rent can be structured
The company lists several rent patterns: monthly, quarterly, step-up and step-down, and in some cases a moratorium before payments begin. A step-up schedule starts with lower rent and rises over time, which suits a business whose revenue grows as the machine is put to work. A step-down schedule does the reverse and suits an asset that loses productivity or a business with strong early cash flow.
A moratorium can help a construction firm that needs months to deploy a new machine before it earns anything. It is marked as available only in some cases, so it is not a right. A business owner should ask early whether a moratorium is possible for the equipment in question, since the answer shapes the cash-flow plan. The company also publishes an annualised cost to the customer model for leasing in its policy documents. Reading that document before signing helps you compare the true yearly cost of a lease with a bank term loan on the same equipment.
Equity funding for startups and growing firms
The second business line is equity finance for viable startups and for existing companies that want to expand. The company says it is sector-agnostic, while naming preferred areas: healthcare, food processing, education, hospitality, IT and IT-enabled services, logistics, water and clean technology. A founder in one of these fields may find the conversation easier, though the list is a preference and not a guarantee.
The instruments mentioned are straight equity, optionally convertible debentures and OCCPS, which are optionally convertible cumulative preference shares. The investment horizon is stated as within five years, with an option of an earlier exit. In practice that means the company expects to sell its stake or have it bought back within that window, and a founder should plan for how that exit would be funded.
Equity funding in this sense is a negotiated private investment, not a crowdfunding campaign open to the public. The company promises neither approval nor a funding amount, so ask what ticket size it considers. A founder weighing this route should also compare it with loans under public schemes such as Startup India recognition or collateral-free loans through banks, because giving up equity has a long-term cost that a lease or a loan does not.
Cheraman Financial Services: eligibility and how to make contact
The company sets out no formal eligibility criteria for either product, and it lists no minimum turnover, years in business or credit score. A prospective customer should expect the company to ask for business plans, financial statements and identity and address documents, but the exact set has to be requested.
You can reach the company at its Vyttila office in Ernakulam or on the telephone number 0484-4021401. Ask whether the person you speak to can send the terms in writing, including the lease rent schedule, any processing charges and the exit mechanism for equity. Note the name of the officer you speak to and the date of each conversation, and compare any quotation with an offer from a bank for the same equipment before you decide. A written comparison of the total rent over the full tenure against the purchase price of the asset shows the real cost of leasing.
Policies that protect the customer
Three policy documents are available for download from the company’s website: the annualised cost to the customer model for leasing, the customer grievance redressal mechanism and the fair practice code. A fair practice code is the set of conduct standards that the RBI expects NBFCs to follow, covering how loan terms are communicated and how complaints are handled.
If a dispute cannot be settled with the company, the RBI Integrated Ombudsman Scheme accepts complaints against NBFCs. Keep copies of the signed agreement, the rent schedule and every payment receipt, as these are the records any grievance process will ask for.
Terms change over time, so confirm the current terms in a direct conversation with the company, and ask for them in writing, before you commit to a lease or an investment. If the terms are shared by email or in a brochure, keep a copy, because the signed agreement is what counts in the end and it should match what you were told.