Money & Banking

M&M Financial Services to raise Rs 2,000 cr via NCDs

Priyanka Pani Mumbai | Updated on January 11, 2018

Mahindra and Mahindra Financial Services (Mahindra Finance) plans to raise Rs 2,000 crore through issue of unsecured redeemable NCDs (non convertible debentures) via a public issue to fund its rural lending abilities.

The issue opens on July 10, 2017 and closes on July 28, 2017. However, the issue with base size of Rs 250 crore, can be closed earlier than July 28, depending on the success of the subscription, said a top Mahindra Finance official.

This is the second such NCD that the company has raised in two years. "We have doubled our issue size and the confidence has come from the positive sentiment in the rural economy auguring well," said its Chief financial Officer V Ravi.

He added that the issue will be split between four categories of investors – qualified institutional buyers (QIB), corporates, high networth individuals (HNI), and retail individuals and will be offered in three tenures – seven, 10 and 15 years. For QIBs and corporates the coupons on offer are 7.75 per cent, 7.90 per cent, and 7.95 per cent respectively. For the remaining two categories, the rates offered are higher at 7.85 per cent, 8 per cent, and 8.05 per cent respectively, payable annually.

Talking to the press, Mahindra Finance's Managing Director Ramesh Iyer said that, "Drought and demonetisation has impacted the rural market. However, last year monsoon and the better than expected monsoon this year, we are expecting a good growth. The sentiment will continue to remain good from what we have seen in the last several years."

He further added that infrastructure and farm related cash flow is very important and is expected to support the rural growth. "We are expecting to maintain a 20 percent growth this year also," Iyer said adding that last year the growth was slightly impacted by the poor monsoon in FY 16 and also demonetisation last year.

The company's balance sheet currently stands at around Rs 46,000 crore, with liabilities standing at Rs 36,000 crore.

Published on July 05, 2017

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