Mahindra & Mahindra Financial Services Ltd (MMFSL) is one of the leading non-banking finance companies with customers primarily in the rural and semi-urban markets of India. It is primarily engaged in providing financing for new and pre-owned auto and utility vehicles, tractors, cars and commercial vehicles. The company also provides housing finance; manage mutual funds, personal loans, financing to small and medium enterprises, insurance broking and mutual fund distribution services. In addition, it provides wholesale inventory financing to dealers and retail financing to customers in the United States for purchase of Mahindra tractors through Mahindra Finance USA LLC (MF USA), its joint venture with De Lage Landen Financial Services Inc., which is a member of the Rabobank Group. MMFSL is a part of the Mahindra group, which is one of the largest business conglomerates in India. Mahindra runs an extensive network of 1,296 offices spread across 27 states and 5 union territories. The company has 20,201 employees in its various offices. For the purpose of onward lending, financing, refinancing the existing indebtness and long term working capital needs (75% of fund mobilized) as well as general corpus fund need (25% of fund mobilized), MMFSL is coming out with debt offer of Secured and/or Unsecured subordinated Redeemable Non-Convertible Debentures of Rs. 1000 each for Rs. 500 crore with a green shoe option to retain oversubscription to the tune of Rs. 3000 crore making the total issue size of Rs. 3500 crore. Out of this Tranche-I issue Rs.2500 crore will be secured instruments and Rs. 1000 crore will be unsecured one. MMFSL has overall self limit of Rs. 10000 crore worth of debt issue. NCDs have the tenure of 39 months,5, 8 and 10 years with an annual interest payment. For the said tenures, it offers 9.00%, 9.10%, 9.20% and 9.35% for QIBs and Corporate and 9.05%, 9.15%, 9.30% and 9.50% for HNIs and Retail categories respectively. This offer is rated 'IND AAA' / Stable' and CARE AAA/Stable for an amount of Rs. 3500 crore, by CARE. The rating of NCDs indicate that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations and carry lowest credit risk.
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