Mahindra & Mahindra (M&M) Financial Services today decided to raise up to Rs 570 crore through institutional placement of equities to increase authorised capital to Rs 190 crore and expand business.
The decisions were taken by the board of directors of the non-banking finance company (NBFC) at its meeting, Mahindra & Mahindra Financial Services said in a filing to the Bombay Stock Exchange.
"...The board has approved raising funds by issue of equity shares for an aggregate amount not exceeding Rs 570 crore by way of a qualified institutions placement to qualified institutional buyers at such time, price and on such other terms and conditions as may be determined by the committee of directors," it said.
The capital is to be raised to augment the company's long term resources by enhancing capital base, besides leveraging business opportunities, provide funding for loans to its customers and for general corporate purposes.
The board has also approved increasing the authorised capital of M&M Financial Services to Rs 190 crore, from the current Rs 160 crore.
Besides, the board gave a nod to increase the limit for investments by foreign institutional investors in the company to 49 per cent of equity from the existing 35 per cent.
"The company would be seeking consent of the shareholders for the matters by a postal ballot...," it said.
Meanwhile, ratings firm Crisil today upgraded the long-term debt instruments and bank facilities of M&M Financial Services to stable, underlining its strong financial position and resource profile.
"Crisil has upgraded its ratings on the long-term debt instruments and bank facilities of Mahindra & Mahindra Financial Services Ltd to 'AA+/FAAA/Stable' from 'AA/ FAA+/Positive'," it said.
This rating indicates that the degree of safety regarding timely payment of interest and principal is very strong.
