M&M Financial board re-approves ₹3,000 crore rights issue plan, no fresh equity offer proposed

Mahindra & Mahindra Financial Services Limited (MMFSL), the non-banking financial company (NBFC) arm of Mahindra Group, has reaffirmed its commitment to strengthening its capital base by reapproving a ₹3,000 crore rights issue.

The decision, made during the Board meeting on May 2, 2025, supersedes the earlier approval granted on February 13, 2025, and aligns with the market regulator Securities and Exchange Board of India's (SEBI) simplified regulations introduced on March 3, 2025.

Earlier on February 13, 2025, according to the exchange filing, the Board of Directors of M&M Financial Services had, inter alia, considered and approved a fundraising plan through the offer and issuance of fully paid-up equity shares of the company with a face value of ₹2 each, for an amount not exceeding ₹3,000 crore, by way of a rights issue to eligible equity shareholders as on the record date.

The issue will be offered to eligible equity shareholders as of a record date to be announced later, in accordance with SEBI regulations and subject to necessary approvals.

The purpose of the fund raise is to maintain a strong capital adequacy ratio and support the company's asset under management (AUM) growth plans. Additionally, the company clarified that this resolution is not for any additional issuance but a fresh approval of the previously announced shares.

Here are the other key points from the meet:

• MMFSL has exhibited robust growth in its secured asset portfolio, with an AUM CAGR of 20% (last 24 months).
• The company has maintained a strong focus on asset quality, as reflected in its GS3 ratio staying below 4% throughout FY25, and Credit Cost remaining under 2%.
• As a AAA-rated NBFC catering to Emerging India, MMFSL aims to leverage India’s growth through its diversified product portfolio.
• MMFSL further plans to launch a Rights Issue of up to ₹3,000 crore to bolster its Tier 1 capital.
• This capital infusion is expected to increase Tier 1 Capital by over 200 basis points, supporting the company’s growth ambitions over the coming years.

Shares of Mahindra and Mahindra Financial Services Limited closed 0.01% lower at ₹262 apiece on the NSE, whereas shares of Mahindra And Mahindra closed 0.35% lower at ₹2,918.60 apiece on the NSE.