M&M Fin Services shares surge after board approves Rs 750 cr fundraise

Mahindra and Mahindra Financial Services share price moved up by 3.3 per cent at Rs 331.25 per share on the BSE in Monday's intraday deals

Mahindra and Mahindra Financial Services share price moved up by 3.82 per cent at Rs 332.80 per share on the BSE in Monday’s intraday deals. This came after the company’s board of directors approved a fundraise worth Rs 750 crore with a green shoe option up to Rs 500 crore.

A green shoe option, also known as an over-allotment option, is a provision that allows the underwriter the right to sell more shares than originally planned.

The non banking financial service (NBFC) company in an exchange filing said that it plans to issue up to 1,25,000 debentures at a face value of Rs 1,00,000. The tenure of the instrument is around 3 years & 89 days from the deemed date of allotment, i.e., from 26th September 2024 onwards. 

 

The debentures will mature or can be redeemed on 24th December 2027 and offer a fixed interest rate of 8.01 per cent per annum, the company said on Monday. Further, the debentures will be listed on the wholesale debt market segment of BSE.

“Debentures shall be secured by way of exclusive charge in favour of the Debenture Trustee on present and/or future receivables under Loan contracts/Hire Purchase/Lease, owned Assets and Book debts to the extent of 100 per cent of Debenture outstanding. The security shall be created on assets which are free from any encumbrances. The Company will create appropriate security in favour of the debenture trustee within the time frame prescribed as per applicable law,” the company said in the filing. 

Mahindra and Mahindra Financial Services reported a 45 per cent increase in net profit for the June quarter of financial year 2024-25 (Q1FY25), reaching Rs 513 crore, compared to Rs 353 crore in the same period last year. 

The core net interest income rose by 15 per cent to Rs 1,932 crore, while the interest margin narrowed to 6.6 per cent from 7.1 per cent in the previous quarter. Total income for the reporting quarter grew by 20 per cent to Rs 3,760 crore, and assets under management increased by 23 per cent to Rs 1.06 trillion.

Tha market capitalisation of M&M Financial Services is Rs 41,069 crore, according to Bombay Stock Exchange (BSE).

Its shares are trading at a price to earnings multiple of 20.63 times with an earning per share of Rs 15.54. The 52-week high of the company’s share is Rs 336.75 while its 52-week low is Rs 243.90 a piece. 

At 3:20 PM, M&M Financial Services shares were trading 3.7 higher at Rs 332.40 . In comparison, the BSE Sensex was trading 0.39 per cent higher at 84,870 levels.