Mahindra & Mahindra Financial Services Ltd (MMFSL), one of India’s leading non-banking financial companies (NBFCs), has launched a rights issue worth ₹2,996.16 crore to strengthen its capital base and support future growth initiatives. The record date for shareholder eligibility has been set as May 14, 2025, and the issue will open for subscription on May 22, 2025.
This rights issue aims to bolster the company’s long-term lending capacity, improve regulatory capital buffers, and accelerate its digital transformation plans.
Rights Issue Details
- Issue Size: ₹2,996.16 crore
- Number of Shares Offered: 15.44 crore fully paid-up equity shares
- Issue Price: ₹194 per share (Face value: ₹2; Premium: ₹192)
- Rights Ratio: 1 equity share for every 8 fully paid-up shares held
- Record Date: May 14, 2025
- Issue Opens: May 22, 2025
- Issue Closes: June 6, 2025
Shareholders will be required to pay the full issue price at the time of application. They can either subscribe to the entitled shares or renounce their rights, partially or fully, through stock exchanges or off-market transfers within the specified dates.
About Mahindra & Mahindra Financial Services Ltd
Mahindra & Mahindra Finance is a prominent NBFC under the Mahindra Group umbrella, catering primarily to rural and semi-urban India. The company specializes in vehicle financing, SME loans, and other financial products tailored to underserved markets.
As of now, MMFSL has over 1,300 branches across India and serves more than 8 million customers. The rights issue is seen as a strategic move to prepare the company for the next leg of expansion, especially in the post-pandemic credit demand recovery phase.
Financial Performance Snapshot
FY25 Performance Highlights:
- Post-Tax Profit: ₹2,345 crore (up 33% YoY)
- Loan Book Growth: 17%
- Net Interest Income (NII): ₹2,156 crore (up 9% YoY)
- Interest Margin: 6.5% (down from 7.1% YoY)
Q3 FY25 was notably strong, with:
- PAT: ₹899 crore (up 63% YoY)
- Total Income: ₹4,144 crore (up 19% YoY)
- Disbursements: ₹16,467 crore (up 7% YoY)
These results reflect overall strength in business momentum, albeit with some recent pressure on margins and provisioning.
Shareholder Outlook
Ahead of the rights issue announcement, shares of Mahindra Finance traded 2.35% lower, closing at ₹255.15 on the BSE. The market appears to be cautiously optimistic, with attention now shifting to subscription levels and the deployment of raised capital.
This capital infusion is expected to:
- Enhance capital adequacy
- Improve long-term lending capabilities
- Support digital and operational growth
- Meet evolving regulatory norms
For existing shareholders, the rights issue presents an opportunity to increase their stake at a discount to the current market price. However, the decision to subscribe or renounce will depend on individual investment strategies and outlook on the company’s future trajectory.
Looking Ahead
With a steady loan book expansion and focus on rural credit delivery, Mahindra Finance continues to be a key player in India’s financial inclusion landscape. The successful execution of this rights issue could position the company to capitalize on upcoming credit cycles, especially in the rural and semi-urban segments where it enjoys strong brand equity.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice.
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