Mahindra & Mahindra Financial Tranche I - NCD Offer Review

Published on Friday, May 20, 2016 by Dilip Davda

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Mahindra & Mahindra Financial Tranche I  - NCD Offer Review

Mahindra & Mahindra Financial Services Ltd. (MMFSL) is a M & M group’s finance arm. It primarily focuses on providing financing for purchases of auto and utility vehicles, tractors, cars, commercial vehicles and construction equipments and pre-owned vehicles and others which accounted for 30.4%, 14.7%, 22.3%, 11.2% and 21.4% of estimated total value of the assets financed, respectively, for the year ended March 31, 2016. The company benefits from its close relationships with dealers and long-standing relationships with OEMs, which allows it to provide on-site financing at dealerships.

For the purpose of onward lending, financing, refinancing the existing indebtedness of our Company, long-term Working capital; and to raise General corporate purposes fund, the company is coming out with its maiden unsecured subordinated redeemable non-convertible debentures having a face value of Rs. 1000 each to mobilize Rs. 250 crore with a permission to retain oversubscription to the tune of Rs. 750 crore thus making an aggregate size of the issue for Rs. 1000 crore. Issue opens for subscription on 25.05.16 and will close on or before 10.06.16. Minimum application is to be made for 10 NCDs and in multiple of 1 NCD thereon, thereafter. Issue is available for allotment in demat as well as physical mode, however, trading will take place only in demat mode. NCDs have tenures of 66 months, 84 months and 120 months and offers coupon rates ranging from 8.34% to 8.8% for non-retail categories and 8.44% to 9% for retail category depending upon choice of the investors. Reservation in the issue is made for 20% for QIBs, 20% for Corporates, 30% for HNIs and 30% for retail investors. The NCDs proposed to be issued under this Issue have been rated “CARE AAA” by CARE and “IND AAA” by India Ratings. These rating indicate that instruments with this rating are considered to have highest degree of safety regarding timely servicing of financial obligations and carry lowest credit risk. Post allotment, NCDs will be listed on BSE. Its existing long term debt equity ratio of 4.12 will rise to 4.29 post this issue.

Issue is lead managed by ICICI Securities Limited, Edelweiss Financial Services Limited, A. K. Capital Services Limited, SBI Capital Markets Limited, JM Financial Institutional Securities Limited, Trust Investment Advisors Private Limited and Yes Securities (India) Limited. Axis Trustee Services Limited is the debenture trustee and Karvy Computershare Pvt Ltd is the registrar to the issue.

On performance front, the company has posted steady growth in top line for last six fiscals. However, it suffered a setback in bottom-line for the last fiscal 2015 due to higher provisions for finance cost and depreciation.

Conclusion: Considering good rating and the fancy for the group in the market, Investment may be considered for steady returns.

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About Author

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 prior to 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 are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.



20. shrenik doshi  Sep 1, 2016 18:45 I Like It. | Report Abuse Reply
what is the script code for NCD having INE 774D08MA6
20.1. vish  Oct 29, 2016 19:41 I Like It. | Report Abuse
chk here
19. Kris  Aug 9, 2016 11:53 I Like It. | Report Abuse Reply
script code in BSE ..anybody can post
19.1. shrenik m doshi  Sep 1, 2016 18:28 I Like It. | Report Abuse
let me know the script code for INE 774D08MA6
18. gajendra halani  Jun 14, 2016 12:49 I Like It. | Report Abuse Reply
when will be the listing of M & M Fin.Bond? Pls.anyone knows about it..
17. ASHOK KUMAR GUPTA  Jun 10, 2016 19:42 I Like It. | Report Abuse Reply
m&m fin ncd ki listing - 17/06/2016 - ko hogi & tentetiv primiam 100 to 150 rs. tak rahega
16. Pramesh  Jun 10, 2016 11:43 I Like It. | Report Abuse Reply
% of listing
15. jigaReligare  Jun 9, 2016 08:54 I Like It. | Report Abuse Reply
listing date of m&m
15.1. nimit ss  Jun 9, 2016 09:40 I Like It. | Report Abuse
today.. listed ..
14. jigaReligare  Jun 9, 2016 08:54 I Like It. | Report Abuse Reply
listing date of m&m
13. mukesh bansal  Jun 8, 2016 10:58 I Like It. | Report Abuse Reply
How much grey MKT premium on bonds
13.1. S KUMAR  Jun 8, 2016 14:51 I Like It. | Report Abuse
GMP 100
12. Jatin  Jun 7, 2016 20:19 I Like It. | Report Abuse Reply
Hi all...pls give me allotment status link ??
11. ASHOK KUMAR GUPTA  Jun 7, 2016 16:00 I Like It. | Report Abuse Reply
10. Tejas Shah  Jun 7, 2016 11:03 I Like It. | Report Abuse Reply
Yesterday Already Credit In Demat Account
9. nimit ss  Jun 6, 2016 17:56 I Like It. | Report Abuse Reply
in a day or two we will get allotment details, refund and NCD in demat. trading / listing by Thursday / Friday.
8. nimit ss  Jun 6, 2016 17:55 I Like It. | Report Abuse Reply
in a day or two we will get allotment details, refund and NCD in demat. trading / listing by weekend.
7. RISHI SAGAR  Jun 6, 2016 15:48 I Like It. | Report Abuse Reply
6. DEVESH H SHETH  Jun 6, 2016 10:57 I Like It. | Report Abuse Reply
5. b.l.baheti  Jun 3, 2016 15:52 I Like It. | Report Abuse Reply
retail sub detail please
5.1. B.L.BAHETI  Jun 4, 2016 14:14 I Like It. | Report Abuse
m&m finance ncd retail alloted full.
4. KETAN SHAH  Jun 1, 2016 12:14 I Like It. | Report Abuse Reply
Please let''s know how many times oversubscribe Mahindra Finance NCD ?
3. vijay chaudhari  May 26, 2016 11:57 I Like It. | Report Abuse Reply
how to i apply
2. Piyush Patwa  May 23, 2016 15:00 I Like It. | Report Abuse Reply
Any Listing Gains?
2.1. Yuvraj  May 25, 2016 21:58 I Like It. | Report Abuse
NCD are hardly traded. I have not seen any buyer or seller post listing. Moreover NCD is for long term steady return.
1. ipo invester Haryana  May 21, 2016 14:38 I Like It. | Report Abuse Reply
Any listing gain in this NCD ?