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Mahindra Financial Rights Offer (July 2020) Review

Published on Wednesday, July 22, 2020 by Dilip Davda

Mahindra Financial Rights Offer (July 2020) Review
  • This is the second fast track rights issue offer of CY2020 amidst COVID-19 pandemic.
  • MMFSL is a finance service arm of a well diverse Mahindra group.
  • Rights issue is at a discount of around 67.5% on ex-right quote of Day One.
  • Online application mode is strongly recommended.
  • Shareholders should not miss this mini bonus like lucrative offer.

PREFACE

Amidst COVID-19 pandemic scare world over, we are set to see some changes in lifestyle as well as on security market process front. We have already seen a fast track mega rights offer from Reliance Industries that has set a net world record of generating funds in a shortest period of time. This issue has definitely leaded to new fast track issue process. Under the same process while we have seen entry of mega FPO from Yes Bank Ltd., we are witnessing yet another fast track rights issue from MMFSL.

ABOUT COMPANY

Mahindra & Mahindra Financial Services Ltd. (MMFSL) is one of the leading deposit taking non-banking finance companies with customers primarily in the rural and semi-urban markets of India. It is primarily engaged in providing financing for new and pre-owned auto and utility vehicles (including three wheelers), tractors, cars and commercial vehicles. MMFSL also provides housing finance; manage mutual funds, personal loans, financing to micro, small and medium enterprises, insurance broking and mutual fund distribution services. In addition, it provides wholesale inventory-financing to dealers and retail-financing to customers in the United States for purchase of Mahindra tractors and utility vehicles through Mahindra Finance USA LLC ('MF USA'), company's Associate, which has entered into a joint venture agreement with De Lage Landen Financial Services Inc., which is a member of the Rabobank group.

In August 2019, the company entered into a joint venture with Ideal Finance Limited to offer financing services in Sri Lanka. It is a part of the Mahindra group, which is one of the largest business conglomerates in India. On a consolidated basis MMFSL has established a pan-India presence, spanning 27 states and seven union territories through 1739 offices and 32682 employees, as of March 31, 2020. It primarily focuses on providing financing for purchases of auto and utility vehicles (including three wheelers), tractors, cars, commercial vehicles and construction equipment, and pre-owned vehicles which accounted for 27.7%, 16.4%, 19.2%, 15.3% and 18.1% of estimated total value of the assets financed by the company, respectively, for the Financial Year 2020. The company benefits from our close relationships with dealers and long-standing relationships with OEMs, which allows it to provide on-site financing at dealerships. It is also able to offer loan products to existing as well as new customers through direct marketing initiative.

Mahindra & Mahindra, MMFSL's promoter and the flagship company of the Mahindra group, had a market capitalization of Rs. 634.90 billion as of June 30, 2020. The Mahindra group operates in several businesses and has a strong presence in the automotive, farm-equipment, information technology, financial services, aerospace, real estate, hospitality and logistics businesses and after-market sales and services of pre-owned vehicles.

ISSUE DETAILS

To finance its plans for repayment/prepayment of certain borrowings (Rs. 1600 cr.), long term capital funding (Rs. 800 cr.), General corpus fund (Rs. 679.08 cr.), MMFSL is coming out with a rights issue of 617764960 equity share of Rs. 2 each at a fixed price of Rs. 50 per share to mobilize Rs. 3088.83 cr. This issue opens for subscription on 28.07.20 and will close on 11.08.20. MMFSL has offered rights shares in the ratio of 1 share for every 1 share held at a hefty discount, which is termed as a 'Mini Bonus' for the stakeholders. MMFSL is spending Rs. 9.8 cr. for this issue process.

After the issue, MMFSL's current paid up equity capital of Rs. 123.55 cr. will stand enhanced to Rs. 247.11 cr. At the exchange adjusted ex-right price of Rs. 138.90 per share on fully diluted post right issue equity, its market cap comes to Rs. 17167 cr. However, with the right issue discounted offer price, MMFSL is looking at a market cap of Rs. 6177.65 cr. Based on ex-right closing rate of Rs. 153.95 (22.07.20), market cap stands at Rs. 19021 cr.

This issue is jointly lead managed by Kotak Mahindra Capital Co. Ltd., Axis Capital Ltd., BNP Paribas, Citigroup Global Markets India Pvt. Ltd., HDFC Bank Ltd., HSBC Securities and Capital Markets (India) Pvt. Ltd., ICICI Securities Ltd., Nomura Financial Advisory and Securities (India) Pvt. Ltd. and SBI Capital Markets Ltd., while Kfin Technologies Pvt. Ltd. is acting as registrar to the issue. . Post allotment, shares will be listed on BSE and NSE. It is advisable to follow online application process for this lucrative offer.

FINANCIAL PERFORMANCE

On financial performance front, on a consolidated basis, MMFSL has reported total income/net profits of Rs. 10430.86 cr. / Rs. 1867.28 cr. (FY19), Rs. 11996.46 cr. / Rs. 1085.82 cr. (FY20). Lower bottom line is attributed for higher finance cost, depreciation provisioning and impairment of financial instruments for the concluded fiscal. For Q1 of FY21, it has earned net profit of Rs. 432.12 cr. on total income of Rs. 3068.68 cr. MMFSL's NAV stood at Rs. 200.97 as on 30.06.2020. As on same date, MMFSL's debt equity ratio was 5.6. Currently its total debt stands at Rs. 65634 cr.

CONSLUSION

Shares of MMFSL turned ex-right on 22.07.20 and opened at Rs. 136.95, marked high/low of Rs. 159.50/134.30 and finally closed on day one at Rs. 153.95. It last quoted at Rs. 227.70 on cum-right basis (21.07.20). It has seen last 52 weeks high/low of Rs. 246/76 (adjusted for post right status). Considering its ex-right closing price of Rs. 153.95, this issue is at a discount of 67.5%. Thus this mini bonus like lucrative offer is worth grabbing. (Subscribe).

 

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. Above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

 (SEBI registered Research Analyst-Mumbai).

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103 Comments

53. Lekkala   I Like It. |Report Abuse|  Link|August 2, 2020 7:26:07 PMReply
I have 50 RE shares from M&M Finance. and I have received confirmation letter from M&M and 50 RE shares are showing in my Demat Account. but when I want to buy online my Demat and PAN is not accepting and giving message enter 16 characters even I enter the correct details.i have registered in easi with same demat and pan. please advise how to buy my shares. I have NRO account is this any problem.
53.1. Ou Ai   I Like It. |Report Abuse|  Link|August 3, 2020 4:55:08 AM
In KFIN site you may be entering DPID and PAN. It's incorrect. Need to enter DPID beginning with IN........ (8 digits) followed by your Customer ID (8 digits) , adds to 16. Nowhere do you need to enter PAN number.
52. Arun   I Like It. |Report Abuse|  Link|August 1, 2020 8:06:22 AMReply
I purchased 100 shares of M&M Finance on 22.7.20. How can I apply for the right issue ?
52.1. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 1:54:24 PM
Record Date for rights was 23rd July and ex rights date was 22nd July. You purchased ex rights at lower price. So no eligibility for rights.
52.2. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:40:51 PM
You purchased ex rights. So not eligible.
51. Vijayakrishna Iyengar   I Like It. 1|Report Abuse|  Link|July 25, 2020 10:46:57 AMReply
Hello Friends,

I bought 1003 shares on 21/07/2020, but only 866 shares credited to my DP Account (Sharekhan) and I got the entitlement letter for 866 shares only. Please advise how to get the remaining 137 rights shares.

With regards,

Vijayakrishna
51.7. VarunS   I Like It. |Report Abuse|  Link|July 29, 2020 10:10:31 AM
Hi All,

Kindly check your DP statement. When did you purchase and how much?
How many rights were allotted and then call the customer care & drop a email.

Also, lodge a complaints on igc@sharekhan.com.

If you still need help, let me know
51.8. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:16:28 PM
Request your broker transfer those RE received on your behalf to your Dmat off line transfer and you apply for rights.
50. Pramod Singh   I Like It. |Report Abuse|  Link|July 29, 2020 10:44:37 AMReply
My Dear Experts,
If I am going to buy 200 shares of M&M Financial in Cash delivery today or tomorrow (29 or 30 July 2020). Will this be eligible for the current Rights issue which is ending on 11th August 2020?
Please reply as soon as possible.
Thanks
50.1. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:14:50 PM
Not eligible. Date was 22nd July 2020
49. Sangram   I Like It. |Report Abuse|  Link|July 29, 2020 12:06:02 PMReply
Hello,

I have 100 shares of M&mfs and it's showing additional 100 RE shares at zero cost price in my portfollio. I would like to know for these new 100 additional shares, do I have to apply some where or I will get them automatically added.
49.1. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:13:57 PM
Either apply from your broker platforms through ASBA or from KFIN at karvy registrars.
48. Thangamani V   I Like It. |Report Abuse|  Link|July 29, 2020 9:35:03 PMReply
I have rights entitlements 21.
Tomorrow going to buy 10 rights in NSE / BSE tomorrow,30th and further 10 on 31st July 2020.
I think I will get my RE 20 in my DP account before the Rights Issue is closed.
Can I apply for my total RE 21+10+10 =41 on 30th itself, before the bought REs are credited to my DP account?
48.1. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:12:50 PM
You have to apply after RE s are credited to your account. You can apply multiple times for different lots if you get it delivered at different times. But, it is convenient to apply all toghter.
47. Raju   I Like It. |Report Abuse|  Link|July 29, 2020 7:12:19 PMReply
i have paid the amount online for m&m finance right issue 2 days before but today also the re shares remains same when will it change into regular shares
47.1. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:09:33 PM
Will be allotted 7 days after rights issue closure date of 13th August 2020
46. Debmalya   I Like It. |Report Abuse|  Link|July 31, 2020 6:26:06 PMReply
HI, I have 100 shares, can I apply for 200?
46.1. Ou Ai   I Like It. |Report Abuse|  Link|August 2, 2020 2:03:32 PM
If you had shares as on 23rd July 20 in your Dmat you would have received 100 rights entitlement for you to apply
.
45. CA. JAGDISH GOKANI   I Like It. |Report Abuse|  Link|July 31, 2020 12:56:13 PMReply
Is there any link or group where i found all the right issue entitlement trading currently ? Or upcoming Right
44. mohan   I Like It. |Report Abuse|  Link|July 30, 2020 12:59:21 PMReply
Hi ..Can a NRI invest in the same ..
If yes how
Plz share
44.1. DG   I Like It. |Report Abuse|  Link|July 30, 2020 6:18:02 PM
Yes, provided you have rights entitlement available in your demat account

use Bank's ASBA option to apply
43. Amey   I Like It. |Report Abuse|  Link|July 30, 2020 1:33:17 PMReply
I am NRI and have 800 right issue shares how can I apply for right as RWAP dosent work for NRI
43.1. DG   I Like It. |Report Abuse|  Link|July 30, 2020 6:16:18 PM
Hi,
you can go to your NRI Bank account and use ASBA to subscribe. you will need to add your Demat account details here and apply from Bank's account ASBA option to apply.
42. Mohit kalwar   I Like It. |Report Abuse|  Link|July 29, 2020 12:02:27 AMReply
I bought 36 shares on 22nd july 2020 ....m I elegible for rights share ..??
42.2. Surendra   I Like It. |Report Abuse|  Link|July 30, 2020 3:49:32 PM
No... u r not eligible, since u bought shares on exdate
42.3. Suresh Purohit   I Like It. |Report Abuse|  Link|July 30, 2020 4:30:47 PM
You are not eligible,since shares bought by you on 22nd July will be credited to your Dmat account on t+2 days the shares are not there on the 22nd in your Dmat account,hence you not eligible for the right issue.
41. Sam   I Like It. |Report Abuse|  Link|July 29, 2020 10:05:28 PMReply
Hi i buy share on 21_ July n sell on same day and also buy on 22July am i eligible for REs
40. G B Singh   I Like It. |Report Abuse|  Link|July 29, 2020 8:59:48 PMReply
Sir,
Can you send me a link of the registrar or company for applying right issue.
I have only 50 shares, can I apply more.
Thanks
GBSingh
39. Kalpana   I Like It. |Report Abuse|  Link|July 28, 2020 9:15:58 PMReply
I have 50 shares. But how to apply for the right issue through hdfc bank or hdfc security pl explain.
39.1. Ajay Mankotia   I Like It. |Report Abuse|  Link|July 29, 2020 8:57:07 PM
1. http://rights.kfintech.com/mahindra
2. Enter your DP ID:
3. Enter PAN
4. Select Payment Mode e.g. Netbanking
5. Pay through netbanking @50 per share
38. meeta parmar   I Like It. |Report Abuse|  Link|July 29, 2020 8:38:46 AMReply
A ) shares holding in MTF , rights not reflected in DP as well as Position, please guide
where rights are allocated ?
B ) New rights shares listed in what name & earlier M&MFin price 158 & nre rights issue purchase Rs 50, so will demat holding will reflect the price merge or seperate
38.1. VarunS   I Like It. |Report Abuse|  Link|July 29, 2020 10:03:30 AM
A ) shares holding in MTF , rights not reflected in DP as well as Position, please guide
where rights are allocated ?

- This will be shown under your Demat Holding. You will be able to see how many M&M RE is allotted to you and accordingly you can apply.

B ) New rights shares listed in what name & earlier M&MFin price 158 & nre rights issue purchase Rs 50, so will demat holding will reflect the price merge or seperate

- Shares allotted during Rights Issue at Rs 50 will get merged with the actual M&M share post rights issue.

Regards,
Varun
37. Shivakumar   I Like It. |Report Abuse|  Link|July 29, 2020 12:44:11 AMReply
Hi
I bought 50 shares on 21st July at Rs 228 through Axis direct. But still Right entitlement for the shares was not credited to demat account.
Please guide me in getting the entitled shares.

Thanks
Shivakumar
36. gitrading   I Like It. |Report Abuse|  Link|July 28, 2020 10:35:45 PMReply
ANSWER FOR WHERE TO APPLY...
1. ASBA facility in your netbanking site
2. R-WAP (https://rights.kfintech.com/mahindra/)

35. abhishek   I Like It. |Report Abuse|  Link|July 28, 2020 10:23:59 PMReply
I have 1000 shares alloted for right issue entitlement can I bid for 2000 shares under Asia.
34. Rakesh kumar   I Like It. |Report Abuse|  Link|July 28, 2020 5:52:32 PMReply
Union Bank ASBA not showing M&MF right issue any idea?
33. Hemant Sharma   I Like It. |Report Abuse|  Link|July 28, 2020 4:43:27 PMReply
I purchased 20 m&m finance shares on 22/072020.Am I eligible for the right issues. If yes then how to apply as the price in m&m finance RE is more than Rs 50.
32. RGji   I Like It. |Report Abuse|  Link|July 28, 2020 2:57:59 PMReply

I purchased 100 MMfin RE's today at 75 and applied 100 thru asba. Will i be considered for allotment of rights? What if i am not alloted shares? How will i get my RE amount back?
31. Debmalya   I Like It. |Report Abuse|  Link|July 28, 2020 1:40:30 PMReply
Hi all, how to apply in ICICIDirect & Religare? Anybody please help
30. Dhanesh K   I Like It. |Report Abuse|  Link|July 28, 2020 1:33:43 PMReply
Test
29. Dhanu   I Like It. |Report Abuse|  Link|July 28, 2020 1:14:00 PMReply
Hi, I bought 48 shares on 20th July and I'm entitled for 48 shares. But in my Sharekhan account I have only 41 shares. Can anyone tell me what happened and how to get the remaining 7.
I haven't applied for any rights yet.
28. G B Singh   I Like It. |Report Abuse|  Link|July 28, 2020 11:28:42 AMReply
Sir,
Can you send me a link of the registrar or company for applying right issue.
I have only 50 shares, can I apply more.
Thanks
GBSingh
28.1. Pankaj Sharma   I Like It. |Report Abuse|  Link|July 28, 2020 12:28:24 PM
No link required apply online like ipo
27. umarul farook   I Like It. |Report Abuse|  Link|July 28, 2020 11:51:03 AMReply
HAi sir,
i have entitled 15 nos of rights share in my protfolio but how to purchase ?

please tel me the guidlines of pirchase in zerodha
27.1. Pankaj Sharma   I Like It. |Report Abuse|  Link|July 28, 2020 12:26:56 PM
Through as per ipo on line apply
26. Ch Bhaskar Sarma   I Like It. |Report Abuse|  Link|July 28, 2020 10:26:25 AMReply
How to apply for rights issue,i have 300 shares of m&m finance, 300 shares showing RE also.o4 automatically,we can get
25. Deepak Rajput   I Like It. |Report Abuse|  Link|July 24, 2020 2:12:39 PMReply
I bought 1000 shares on 21st July @ 232. am I eligible for right issue? how to claim the right issue , coz its still showing 1000 shares in my account with loss of 90K since I bought at 232 and now price is around 141.
25.1. GURU G   I Like It. |Report Abuse|  Link|July 25, 2020 8:44:02 AM
don't worry 1000 M&MFS-RE share credit in your account
u can sell on nse bse on dated 28.7.20 to 11.8.20
25.2. Harish   I Like It. |Report Abuse|  Link|July 28, 2020 10:18:36 AM
buy 1000 more right issue shares at a cost of Rs 50/- per share. you can cover all your losses.. If you arent applied for rights issue. You will end of with huge losses. Check you mail box for details as company has sent a mail on this issue.
24. Nitin Agarwal   I Like It. |Report Abuse|  Link|July 28, 2020 9:21:11 AMReply
I have 300 shares of M&mfs and it's showing additional 300 RE shares at zero cost price in my portfollio
I wish to know for next 300 RE shares I have to apply or I will get them automatically
23. Gagan   I Like It. |Report Abuse|  Link|July 28, 2020 12:17:33 AMReply
I have a 134 ce option for 30th July expiry and I am at loss . My question is does the right issue a positive news for a short term trader as well . Why did the stock tanked 9percent today . Was it because of rights issue
22. Raghu Raj Singh tomar   I Like It. |Report Abuse|  Link|July 27, 2020 10:03:35 PMReply
Sir I purchased shares of M&M fin on 23/7/20 @148.20 and on 27/7/20 only 6 shares purchased for covering.@136/. What can I do in further.i am entitled for RE or not. Pse send clear guide lines .
21. abhishke   I Like It. |Report Abuse|  Link|July 27, 2020 4:05:23 PMReply
Sir i bought M&M fin at price 205 8 july
and still holding it-cureent price is 128. will i be eligible for rights if i sell these shares now.
i am expectting further dilution
20. KIRPAL   I Like It. |Report Abuse|  Link|July 26, 2020 9:47:55 PMReply
Sir i buy 228₹on 21 July 2000 stock and 22july sell 235₹ same date buy 227₹ i eligibility right issue
20.1. Bobby Bhati   I Like It. |Report Abuse|  Link|July 27, 2020 3:26:31 PM
No bro
19. Nandkumar Kharade   I Like It. |Report Abuse|  Link|July 27, 2020 3:02:52 PMReply
I bought 33 shares on 23rd july
Can I Liable for rights issue
How to apply
18. Vikas Shrivastava   I Like It. |Report Abuse|  Link|July 27, 2020 8:43:25 AMReply
I bought mmfsl share On 22nd July. Will I be eligible for right issue.
17. Kushagra Jalota   I Like It. |Report Abuse|  Link|July 27, 2020 12:03:07 AMReply
Will I be able to buy the 1:1 rights thru icici direct ?
And currently I am in loss due to adjustment , should I buy or not ?
16. Sreekanth   I Like It. |Report Abuse|  Link|July 26, 2020 7:56:48 PMReply
Hi,

I have purchased 870 shares on 21 at July and I have not received mail from any body as broker has not transferred to my DP. Now whether the broker will transfer Rights entitlement to me if not where to complaint those issue. It happened to so many people...
15. Sunanda Pralhadrao Datir   I Like It. |Report Abuse|  Link|July 26, 2020 11:27:20 AMReply
I bought 200 shares @ Rs.234 on 21July 2020.
I have not yet received entitlement letter or message to me. Right Shares quantity 200 nos. is not credited to my Dmat account. It is showing loss in my account. Please do the needful and reply urgently.
14. Shivakumar   I Like It. |Report Abuse|  Link|July 25, 2020 7:05:27 PMReply
Hi sir, i have bought M&M finance 200 shares on 21 july for Rs.230 & on 22nd july again i bought same company 300 share for Rs. 150 and now average per share is Rs. 182.5. i am eligible to right to issue for 200 share. should i buy the right to issue share? if yes how can i apply for it?
13. Aehshankhan   I Like It. |Report Abuse|  Link|July 25, 2020 2:15:41 PMReply
Sir, I have 2000 shares and now I know that I am eligible for the rights offer but sir I don't have ASBA account. Than how can I get benifit for this offer. Plz suggest me Any other way.
12. Sherry mathew varghese   I Like It. |Report Abuse|  Link|July 25, 2020 2:09:15 PMReply
HI,
I would like to know how to buy the M&M right shares to which I am eligible.

Can I use upstox to buy it, if yes steps. If not please let me know how to buy it . Please respond when you see this message it will be a great help
11. Kamlesh Patel   I Like It. |Report Abuse|  Link|July 24, 2020 6:36:21 AMReply
I bought 600 shares on July 23 am I eligible for this?
11.1. GURU G   I Like It. |Report Abuse|  Link|July 25, 2020 8:47:06 AM
no
10. chandrasekar   I Like It. |Report Abuse|  Link|July 24, 2020 12:55:11 PMReply
Hai Sir
I buy 200 M&M finance shares at 23.07.20 at the rate of 153.50, but last 2 days price going down and down
Kindly guide us wait for some time are exit with minimum loss
10.1. GURU G   I Like It. |Report Abuse|  Link|July 25, 2020 8:45:20 AM
one month share in range because of hedge position in M&MFS
9. Hiren   I Like It. |Report Abuse|  Link|July 24, 2020 6:56:48 AMReply
All question one answer.

If you have bought at 230 nearby price then you are eligible.
If you have bought nearby 150 then Right issue price is already factor in. And you are not eligible for Right issue.
9.1. Munna Kumar Singh   I Like It. |Report Abuse|  Link|July 25, 2020 8:43:51 AM
But main question is how we get the benefits....

I have 5000 share holding since March 2020... How I get the benefits....
8. kapil   I Like It. |Report Abuse|  Link|July 24, 2020 10:06:14 PMReply
can i make the payment in cash as my bank signatures are always mismatching
8.1. GURU G   I Like It. |Report Abuse|  Link|July 25, 2020 8:42:02 AM
no by net banking or UPI
7. Anand   I Like It. |Report Abuse|  Link|July 24, 2020 10:34:49 PMReply
I bought on 21 july and sold on 22 july
Is I m eligible for right issue
7.1. GURU G   I Like It. |Report Abuse|  Link|July 25, 2020 8:40:55 AM
yes 100%
6. Ashim kr. Chakraborty   I Like It. |Report Abuse|  Link|July 24, 2020 12:53:38 PMReply
I bought m&m fin share as on 9.7.20 ...am i to fill up any separate form to be elligable to get the right issue ? & if alloted then how to make payment or procedure of payment .
5. Dhanapal   I Like It. |Report Abuse|  Link|July 24, 2020 11:44:40 AMReply
I bought 21st July 230@100 and 22nd 160@100 if I'm eligible for 1:1 share?? Also eligible for rights issue?
5.1. BM   I Like It. 1|Report Abuse|  Link|July 24, 2020 12:26:47 PM
Eligible for 100 only
4. Kamlesh Patel   I Like It. |Report Abuse|  Link|July 24, 2020 6:34:59 AMReply
I bought 600 shares on July 23 am I eligible for this?