• The company is engaged in providing financial services and solutions across the client base.
• It posted growth in its earnings for the reported periods.
• The RI is at a discount of around 25+%, based on its last traded price.
• Investors may park funds for medium to long term.
PREFACE:
The RI is opening on May 22, 2025, and the offer document is dated May 08, 2025, but the documents were uploaded on BSE only on the morning of May 21, 2025. Thus, last minute info sharing is continuing unabatedly. This being a RI for Rs. 2996+ cr. but has no merchant banker is involved, which is highly surprising.
ABOUT COMPANY:
Mahindra & Mahindra Financial Services Ltd. (MMFSL) is a deposit taking, non-banking finance company in India categorized as an upper layer NBFC by the RBI. With a wide distribution network, it offers a comprehensive portfolio of financial services designed to meet the needs of a diverse customer base.
MMFSL’s offerings include financing solutions for individuals and businesses, covering primarily (i) passenger vehicles; (ii) commercial vehicles; (iii) construction equipment; (iv) pre-owned vehicles; (v) tractors; and (vi) three-wheelers. It also provides housing loans, personal loans, insurance distribution, mutual funds, fixed deposits, gold loan and leasing to existing customers and to micro, small, and medium enterprises.
To meet the diverse needs of customer base, the Company has also obtained (i) a ‘corporate agency license’ from IRDAI; (ii) entered into a partnership with a private sector Indian bank to issue co-branded credit and debit cards; and (ii) received TPAP approval from NPCI. This will allow it to build a suite of insurance products for cross-selling, provide payment products to customer base and participate in the customers’ payment ecosystem, and launch its own UPI platform as an engagement tool to participate in the customers’ UPI and bill payments, and also offer them other lending and investment products. The offer document is silent on its employees’ strength data.
ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 154441240 equity shares of Rs. 2 each at a fixed price of Rs. 194 per share to mobilize Rs. 2996.16 cr. The RI opens for subscription on May 22, 2025, and will close on June 05, 2025. The company is offering RI in the ratio of 1 for 8 to its eligible stakeholders as of the record date of May 14, 2025. The company is asking full money on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 8.40 cr. for this RI and from the net proceeds, it will utilize Rs. 2250.00 cr. for augmenting long-term capital and resources for its business activities, Rs. 738 cr. for general corporate purposes.
The RI is self-managed by the company itself, and KFin Technologies Ltd. is the registrar to the issue.
Post-RI, company’s current paid-up capital of Rs. 247.11 cr. will stand enhanced to Rs. 277.99 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 26965.44 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted total revenue/net profit of Rs. 15796.85 cr. / Rs. 1943.05 cr. (FY24), Rs. 18463.10 cr. / Rs. 2260.87 cr. (FY25). As of March 31, 2025, it had equity capital base of Rs. 246.98 cr. supported by free reserves and surplus of Rs. 21282.48 cr. and its NAV stood at Rs. 174.25 per share.
DIVIDEND POLICY:
The company has paid dividend of 180% (FY22), 300% (FY23), and 315% (FY24). It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects. The offer document is silent on its dividend policy.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 532720 (FV Rs. 2).
The scrip last closed on cum-right basis at Rs. 256.40 on May 13, 2025, and opened on an ex-right basis at Rs. 252.55 on May 14, 2025. Since then, it has marked a high/low of Rs. 268.75 / Rs. 250.10. The scrip last closed at Rs. 260.30 as of May 21, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 333.64 / Rs. 235.47.
The promoters’ holding has been constant at 52.16% for the last three quarters ended with March 31, 2025. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on May 21, 2025
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
