Mahindra & Mahindra Financial Services Limited NCD
Mahindra and Mahindra Financial Services Limited (MMFSL) commenced its journey in the rural non-banking finance industry. And with that was born a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape. Since then, we have come a long way, empowering millions of ambitious individuals with personalised finance for a wide range of vehicles, home development requirements and many other diverse endeavours – all to help them live their dreams and Rise in life.
At Mahindra Finance, They are guided by a firm belief in people, their dreams, and their potential to achieve those dreams. Hence, There socially inclusive business model facilitates loans to customers based not on their current financial status, but their future earning capacity. This philosophy has instilled a sense of confidence in the minds of rural and semi-urban India – confidence that allows them to believe that no dream is too big. Today, as one of the leading non-banking finance companies, we are proud to have touched over 4 million lives.
During the course of there journey, apart from emerging as the top tractor financer in India, they have constantly strived towards developing skill sets of the local population. Which is why they provide employment to over 20,000 people in over 1200 branches across India. This not only ensures equal growth opportunity for all, but also enables us to serve our customers better through local understanding and expertise.
The secured NCDs will be allotted for a value of up to Rs2,500 crore and the unsecured NCDs will be allotted for a value of up to Rs1,000 crore within the overall limit of Rs3,500 crore.
Objective of NCD Mahindra & Mahindra Financial Services Limited NCD:
Objective of Mahindra & Mahindra Financial Services Limited NCD are:
1. For the purpose of onward lending, financing, refinancing the existing indebtedness of our Company, longterm working capital
2. General corporate purposes.
Mahindra & Mahindra Financial Services Limited NCD Details:
| Open Date: | Jan 04 2019 |
| Close Date: | Jan 20 2019 |
| Issue Type: | Fixed Price Issue NCD |
| Issue Size: | ₹ 3500 Cr. |
| Face Value: | ₹ 1000 Per NCD |
| Market Lot: | 1 NCD |
| Minimum Order Quantity: | 10 NCD |
| Listing At: | BSE |
Promoters:
Promoters of Mahindra & Mahindra Financial Services Limited NCD Company are:
Mahindra & Mahindra Limited
Financials:
| Year | Revenue | Expense | PAT | EPS |
| 2016 | 5,905.10 | 4,866.92 | 672.6 | 11.92 |
| 2017 | 6,237.54 | 5,617.47 | 400.23 | 7.09 |
| 2018 | 7,206.12 | 5,898.35 | 891.88 | 15.35 |
| Year | NIM | RONW | Capital Adequacy | Book Value | Gross NPA |
| 2017 | 8% | 6% | 17% | 114 | 7.70% |
| 2018 | 9% | 12% | 21% | 151 | 7.40% |
Credit Rating:
The NCDs proposed to be issued under this Issue have been rated ‘CARE AAA (Triple-A); Stable’ for an amount of ₹ 10,000 crores, by CARE and ‘IND AAA; Stable’ for an amount of ₹ 10,000 crores by India Ratings.
The rating of NCDs by CARE and India Ratings 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.
Interest Rates:
| Series | I | II | III | IV |
| Interest Payment | Annual | Annual | Annual | Annual |
| Nature | Secured | Secured | Secured | Unsecured |
| Tenor | 39 M | 60 M | 96 M | 120 M |
| Minimum Application | 10,000(10 NCD) | |||
| Face Value | 1,000 | |||
| In Multiples of | 1000( 1 NCD) | |||
| Coupon (% per annum) for Category 1, and II | 9% | 9.10% | 9.20% | 9.35% |
| Coupon (% per annum) for Category III, and IV | 9% | 9.15% | 9.30% | 9.50% |
Post Tax returns:
(i) Sold after Maturity The interest earned through NCDs will be added to the total income and will be taxed at 5%, 20%, and 30% respectively depending upon the income slab of an Individuals.
(ii) Sold Before Maturity If you decide to sell the NCDs on the stock exchange, capital gains can also arise. If NCDs are sold with in a period of 12 months from the date of allotment, short term capital gains / loss (STCG) will arise and if you decide to sell NCDs after a period of 12 months, the resulting gain or loss is called long term capital gains / loss (LTCG).
Recommendation:
Review and Recommendation of Mahindra & Mahindra Financial Services Limited NCD from our side is:
[The Company has good brand Value. This NCD has come up with good interest rates as compared to Bank FDs. The D/E ratio of 3.21 is also comfortable. The Gross NPA has also come down in FY18 as compared to last year which is another positive for the company.]
Lead Manager of Mahindra & Mahindra Financial Services Limited NCD:
- Edelweiss Capital Limited
- ICICI Securities Limited
Registrar of Mahindra & Mahindra Financial Services Limited NCD:
- Karvy Computershare Private Limited
Discussion on Mahindra & Mahindra Financial Services Limited NCD:
13 Comments
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Dear All,
*Mahindra & Mahindra Financial Services Limited NCD Public issue will be listed on BSE tomorrow i.e. 22-Jan-2018.*
*BSE Listing Circular :*
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20190121-33
Retail Category already oversubscribed on day 1 itself.
The Most important aspect of NCD which every investor should look is whether the company able to timely return the money and will they able to give interest on time. For this purpose, the Credit rating agency plays a big role. They have a pre-defined set of parameters in which they judge companies liquidity, and ability to pay the obligation in time.
Usually, these NBFCs raise money via these NCDs and lend to the borrower in the market. So if the borrower is returning the money on time, then these NCDs will not face any risk and they will timely give investor money back. However, once these borrowers start defaulting, the company, in turn, faces the heat and ultimately the investors may lose their investment.
So every investor needs to look for these three things while investing in these NCDs :
1. Borrower Profile
2. Credit Rating
3. Secured or Unsecured
Mahindra and Mahindra Financial Services basically lend the money to the borrowers who want to buy cars, tractors and commercial vehicles. So we can assume that this borrowing profile is mostly a retail segment and chances of default are very less. The same is reflected in the Credit Rating of the Company. The company has stable CARE AAA rating which has the highest degree of safety.
Shriram Transport Finance generally lends the money to the companies who in turns buy a commercial vehicle for their own use. So here the borrower profile is more of corporate. The risk is more in the corporate profile as compared to retail. The same is reflecting in the Credit rating of the company. As per Care, the rating is AA+/Stable which is slightly risky than AAA.
Remember the Golden Rule:
The More risk in the NCDs, the more will be the interest rates.
Conclusion: While deciding the NCDs always first look for the borrower profile and Credit Rating.
Ok.. Thx for the guidance
Thanks for detailed information and empowering new comers like me ☺🤗
Happy and wealthy New Year to All 🎉🎊👏
Interest rate is low compared to ECL
They are riskier. Where risk is more the interest rates will be high.
Apply
How to apply NCD?? Do I get option in my trading platform like Zerodha or it’s through downloading and filling up forms and then courier, etc??
Please, empower ☺
You can apply through ASBA supported banks similar to IPOs.
Ask your broker.. Offline
This is First come first serve basis NCDs.
Tranche 1 Issue consists of Secured Redeemable Non-Convertible Debentures of face value of Rs.1,000 Each (“Secured NCDs”) and/ or Unsecured, Subordinated, Redeemable Non-Convertible Debentures of face value of Rs.1,000 (Rupees One Thousand) Each (“Unsecured NCDs”) for an amount aggregating up to Rs.500 Cr (“Base Issue Size”) with an option to retain oversubscription up to Rs.3000 Cr which is within the Shelf Limit of Rs.10,000 Cr.
The Secured NCDs shall be allotted for a value of up to Rs. 2500 Cr and the Unsecured NCDs shall be allotted for a value of up to Rs.10 Cr within the overall limit of Rs. 3500 Cr.