MAS Financial Services Boosts Ownership in MAS Rural Housing and Mortgage Finance to 61.33%

On September 12, 2024, MAS Financial Services Limited (MFSL) announced a significant development concerning its subsidiary, MAS Rural Housing and Mortgage Finance Limited (MRHMFL). 

The company stated that as per a letter dated August 29, 2019, and in line with the investment terms agreed upon earlier, MFSL has completed the conversion of its 6% Non-Cumulative Optionally Convertible Preference Shares (OCPS) into equity shares of MRHMFL. 

Following this conversion, MFSL has acquired 3,33,333 equity shares of MRHMFL, representing 33.33% of the total OCPS it held in the subsidiary. This conversion was sanctioned and executed by the Finance Committee of MRHMFL in their meeting held on September 12, 2024. The equity shares were allotted at an offer price of ₹100 per share. Consequently, MFSL’s shareholding in MRHMFL has increased from 60.77% to 61.33%, effective from the date of the allotment.

MRHMFL is a prominent housing finance company registered with the National Housing Bank (NHB). It primarily serves the middle-income segment of society, which is recognized as a vital driver in the housing industry. This segment consists of creditworthy individuals who, despite being largely informal, are significant contributors to the housing sector. As of June 30, 2024, MRHMFL reported a turnover of ₹18.63 crores and a net profit of ₹2.17 crores.

 The conversion of OCPS into equity shares represents a strategic move by MFSL to increase its stake in MRHMFL, reflecting its ongoing commitment and confidence in the subsidiary’s growth and potential.

The private placement of 3,33,333 equity shares at ₹100 each has been executed at arm’s length, ensuring transparency and fairness in the transaction. The increased shareholding aligns with MFSL’s strategic objectives of strengthening its control over MRHMFL and enhancing its influence in the housing finance sector.

This transaction not only consolidates MFSL’s position within MRHMFL but also supports the subsidiary’s expansion plans and operational objectives. With this increased stake, MFSL is poised to leverage its enhanced ownership to drive further growth and development within MRHMFL, contributing positively to the broader housing finance landscape in India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.