Mahindra Fin to raise Rs 1,000 crore via NCDs

By: | Published: May 24, 2016 7:18 AM

Mahindra & Mahindra Financial Services said it will raise up to R1,000 crore through a public issue of non-convertible debentures (NCDs). This will be the maiden such issue for the company. The issue will open on May 25 and closes on June 10, the NBFC of the Mahindra group said.

Mahindra & Mahindra Financial Services said it will raise up to R1,000 crore through a public issue of non-convertible debentures (NCDs). This will be the maiden such issue for the company. The issue will open on May 25 and closes on June 10, the NBFC of the Mahindra group said.

The company will raise the amount through unsecured subordinated redeemable non-convertible debentures, it said in a

statement.

According to vice-chairman and managing director Ramesh Iyer, most of these funds will be mobilized towards the small and medium enterprises segment.

The debt instruments have been rated ‘CARE AAA’ by Credit Analysis & Research (CARE) and IND AAA by India Ratings. These will be listed on the BSE within 12 working days after the issue closes. They are being offered under nine different series for four categories of investors.

For category 1, which is for qualified institutional buyers, and category 2, which is for corporate investors, series I, series II and series III with tenures of 66 months, 84 months and 120 months, respectively, will have coupons of 8.34%, 8.44% and 8.53%.

For category 3, which is for high net worth individuals, and category 4, which is for retail individual investors, series I, series II and series III with tenures of 66 months, 84 months and 120 months, respectively, will have coupons of 8.70%, 8.80% and 9.00%.

“If we have a book that is retail-heavy on the asset side and wholesale-heavy on the liability side, there is a risk mismatch. This is the reason we want to increase the retail portion on the liability side too so that the risk is evened out to some extent,” V. Ravi, chief financial officer at M&M Financial Services, said.

Ravi added that the company is considering other such issuances in near future but particulars will be worked out after analysing responses for this issue.

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