Mahindra Finance to raise up to Rs 3,500 crore via NCDs

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Published: January 4, 2019 2:15:24 AM

On being asked about the effects of higher borrowing costs due to recent liquidity crisis faced by non-banking finance companies (NBFCs), Ramesh Iyer.

We believe the cost has to be shared consumers, original equipment manufacturers and dealers in order to carefully tackle the increase in costs”

Mahindra & Mahindra Financial Services on Thursday announced plans to raise up to `3,500 crore through public issue of non-convertible debentures (NCDs). The company plans to undertake a public issue of NCDs for an amount aggregating up to `500 crore (base issue size), opening on January 4, 2019. The issue will close on January 25. It will have an option to retain oversubscription up to to `3,000 crore aggregating up to `3,500 crore (tranche I issue).

On being asked about the effects of higher borrowing costs due to recent liquidity crisis faced by non-banking finance companies (NBFCs), Ramesh Iyer, vice-chairman & MD, Mahindra & Mahindra Financial Services, said, “We have to be very prudent in passing on the higher borrowing cost to the consumers, our cost of borrowing has increased by 50-60 basis points but the cost for consumers has only gone up by 25 bps. We believe the cost has to be shared consumers, original equipment manufacturers and dealers in order to carefully tackle the increase in costs”

These NCDs, bearing a fixed rate of interest, are being offered under four different Series. Series I (39 months), Series II (60 months) and Series III (96 months) are offered as Secured NCDs while Series IV (120 months) is offered as Unsecured Subordinated NCDs. The coupon rate on Series I, Series II, Series III and Series IV NCDs for Category I (QIB) and Category II (Corporate) holders is 9.00%, 9.10%, 9.20% and 9.35% per annum, respectively, payable annually. The coupon rate on Series I, Series II, Series III and Series IV NCDs for Category III (HNI) and Category IV (Retail Individual) holders is 9.05%, 9.15%, 9.30% and 9.50% per annum, respectively, payable annually.

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