 "M&M Financial jumps 10% as stock turns ex-date today for 1:1 rights issue")
Shares of Mahindra & Mahindra (M&M) Financial Services were up 10 per cent to Rs 152.75 (adjusted to a rights issue) in early morning trade on the BSE on Wednesday after the stock goes ex-rights today.
The board of directors of the company on Saturday, July 18, approved a 1:1 rights issue at Rs 50 per share, amounting to Rs 3,089 crore. The board has fixed Thursday, July 23, 2020, as the record date for the purpose of determining the shareholders of the company who will be eligible to receive rights entitlements in the Issue.
The record date is the cut-off date used to determine which shareholders are entitled to a rights share. Ex-rights means the shares will be available for purchase without the benefit of a rights issue (shares at a discount price) from today.
The rights issue will open on July 28 and close on August 11, 2020. The full amount of the issue price of Rs 50 per share will be payable on application.
Mahindra & Mahindra (M&M), the promoter of the company informed the stock exchanges that the loans and investment committee of the Company has approved to subscribe to the equity shares of M&M Financial Services to the full extent of the Company’s rights entitlement.
The board also approved to subscribe to additional shares as well as to any unsubscribed portion of the rights issue, up to the total Issue size of M&M Financial Services subject to compliance of applicable laws including the minimum public shareholding requirements, it said.
In the past two months, the stock of M&M Financial Services has outperformed the market by surging 78 per cent, as compared to a 23.4 per cent rise in the S&P BSE Sensex.
At 10:04 am, the stock was trading 8 per cent higher at Rs 150 on the BSE, against 0.19 per cent gain in the benchmark index. A combined around 34 million equity shares changing hands on the counter on the NSE and BSE.
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