Mahindra Finance Announces ₹3,000 Crore Rights Issue

Mahindra & Mahindra Financial Services Limited (MMFSL) has announced a rights issue to raise ₹3,000 crore. The decision, taken at a board meeting on 13th February 2025, aims to strengthen the company’s financial position and support future growth. This move aligns with its strategy of maintaining capital adequacy while expanding its asset base.

Strategic Importance of the Rights Issue

The rights issue is a key initiative to enhance MMFSL’s Tier 1 capital by over 200 basis points. With a strong balance sheet, the company aims to leverage India’s economic expansion, particularly in the rural and semi-urban financial services sector. The additional capital will enable MMFSL to sustain its asset growth while ensuring financial stability.

The company has consistently maintained asset quality, with Gross Stage 3 (GS3) assets remaining below 4% and credit costs staying under 2%. This capital infusion will further solidify its ability to provide diverse financial products, including vehicle financing, SME loans, and fixed deposits.

Growth Prospects and Market Position

MMFSL, a leading non-banking financial company (NBFC), has shown a compounded annual growth rate (CAGR) of 21% in its secured asset portfolio over the last 21 months. It serves over 10 million customers, with an asset under management (AUM) exceeding USD 13.7 billion. The company operates across 1,375 locations, reaching rural and semi-urban India.

As a AAA-rated NBFC, MMFSL is well-positioned to benefit from India’s growing domestic consumption and infrastructure development. The capital raised through the rights issue will support its long-term strategy of sustainable expansion while maintaining asset quality.

MMFSL Share Performance

As of February 13, 2025, 11:50 AM, the shares of MMFSL are trading at ₹283.10 per share, reflecting an upside of 2.55% from the previous day’s closing price. Over the past month, the stock has registered a gain of 7.56%. The stock has a 52-week high and low of ₹343.00 and ₹246.20 respectively.

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