Mahindra & Mahindra Financial Services Limited has informed the Exchange regarding a press release dated May 02, 2025, titled "Press Release - Fund Raising".
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Mahindra & Mahindra Financial Services Limited (MMFSL) has re-approved a Rights Issue of up to Rs. 3,000 Crore, superseding its earlier 13th February 2025 approval. The re-approval is to take advantage of SEBI's new simplified Rights Issue regulations notified on 3rd March 2025, which make the process faster and cheaper. The issue size remains unchanged at Rs. 3,000 Crore, and the record date, issue price, and entitlement ratio are yet to be decided. The company says the funds will boost Tier 1 capital by over 200 basis points, helping maintain strong capital adequacy to support AUM growth, which has grown at a 20% CAGR over the last 24 months. MMFSL highlighted its AAA rating, GS3 staying below 4%, and credit costs below 2% as indicators of strong asset quality.
For shareholders: Existing eligible equity shareholders will get the opportunity to subscribe to their proportional share in the rights issue, though pricing has not yet been disclosed. Short-term, the stock may face dilution overhang; long-term, the capital raise supports the NBFC's growth plans and strengthens its balance sheet.