M&M Financial To Raise ₹3000 Cr Via Rights Issue

M&M Financial Services To Raise Rs 3,000 Crore Via Rights Issue

Mahindra and Mahindra Financial Services Ltd. has announced its approval to raise up to Rs 3,000 crore via a rights issue, according to an exchange filing on Thursday.

Details of the Rights Issue

• The board approved fundraising by way of offer and issuance of fully paid-up equity shares of face value of Rs 2 apiece.
• The rights issue aims to raise an amount not exceeding Rs 3,000 crore.
• The terms and conditions of the rights issue will be decided by the company's board or the rights issue committee.

Recent Financial Performance

The announcement follows a report of strong financial performance, with:

• A 63% year-on-year rise in net profit for the quarter ended December, reaching Rs 899 crore.
• A significant drop in impairment on financial instruments by 97% on year to Rs 9.14 crore.

Asset Quality

However, there was some deterioration in asset quality:

• Stage 3 assets rose to 3.9% in December end, compared to 3.83% a quarter ago.
• Net stage 3 assets also increased to 2.0% from 1.59% a quarter ago.

Market Reaction

M&M Financial Services' share price responded positively to the news:

• The share price rose as much as 3.93% to Rs 286.9 during the day.
• As of 11:44 a.m., it was trading 1.85% higher at Rs 281.1 apiece.

Analyst Ratings

Analysts' opinions are mixed:

• Seventeen out of 36 analysts maintain a 'buy' rating.
• Thirteen have a 'hold' rating.
• Six suggest a 'sell' rating'.
• The average 12-month consensus price target implies an upside of 6%.

This rights issue is a strategic move by M&M Financial Services to strengthen its financial position and pursue future growth opportunities.

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Categories: M&M Financial Services, rights issue, stock market