Mahindra Finance to raise around Rs 3,500 cr via non-convertible debentures

Mahindra & Mahindra Financial Services is planning to raise up to Rs 3,500 crore through a non-convertible debenture issue of various maturities.  

The base issue size is Rs 500 crore with an option to retain oversubscription up to Rs 3,000 crore, the non-banking finance company said here on Thursday. 

The funds raised through this first tranche will be used for the purpose of onward lending, financing, refinancing the existing debts, long-term working capital and for general corporate purposes. 

The NCDs bear a fixed interest rate and are being offered under four different series. Series I (39 months), Series II (60 months) and Series III (96 months) are offered as secured NCDs, while Series IV (120 months) is unsecured subordinated debt.

Investors will get 9 to 9.50 per cent per annum, respectively, payable annually.

The amount reserved for secured and unsecured bonds, opening on January 4 and closing on 25, is Rs 2,500 crore and Rs 1,000 crore, respectively.

The lead managers to the issue are Edelweiss Financial Services, AK Capital Services, Axis Bank, ICICI Securities, SBI Caps, Trust Investment Advisors and Yes Securities.

Talking about the Reserve Bank's decision to allow lenders to recast standard MSME loans, company vice-chairman and managing director Ramesh Iyer said it is a good mover but NBFCs have to take a very prudent view of it.

"Just because regulation allows you one reschedulement, you shouldn't jump into rescheduling all the contracts. Our view is that we will review every contract and where we think that the particular consumer is circumstantially impacted and needs additional time we may take a view," he said.

RBI on Tuesday allowed a one-time restructuring of MSME loans with an aggregate exposure, including non-fund based facilities of banks and NBFCs, of up to Rs 25 crore.

The scheme will be applicable for loans that are in default but standard as of January 1, 2019. The RBI said the restructuring has to be implemented by March 2020.