Mahindra Finance to raise upto Rs 8,000 crore through debentures in FY24

Mahindra & Mahindra Financial Services (Mahindra Finance) plans to raise up to Rs 8,000 crore through debentures in FY24 to support business growth. This is in addition to credit lines it holds for bank funding. 

Mahindra Finance had stable and diversified resource profile, and substantial unutilised bank limits provide significant financial flexibility to raise resources at competitive costs to meet increasing funding requirement, according to Rating agency CRISIL.

Its fairly diverse borrowing mix consisted of sources like 26.2 per cent of debentures NCDs, 11.4 per cent of securitisation, 8.4 per cent of fixed deposits, and 38.5 per cent of bank borrowing at the end of December 2022.

The company continued to maintain a comfortable liquidity chest of about three months’ requirement, according to the NBFC’s filing with BSE.

On January 6, CRISIL upgraded Mahindra Finance’s rating for bank loans and debt from AA+ to AAA, driven by the stronger support stance of the parent Mahindra and Mahindra and improvement in the business performance.

Reflecting strong credit offtake in the system, Mahindra Finance’s business assets rose 27 per cent year on year to Rs 82,300 crore at the end of March 2023 (FY23).

According to CRISIL, NBFCs are expected to show credit growth of 13-14 per cent in FY24 versus 12-13 per cent in fiscal 2023. The growth would continue to be driven by the retail segment. Mahindra Finance has indicated that growth would be supported by a robust demand for tractor and used-vehicle loans, among others.

As for the growth trend in FY23, the company’s assets rose by 7 per cent over December 2022. Its disbursement in the fourth quarter ended March 2023 (Q4FY23) was Rs 13,750 crore, showing 50 per cent growth YoY. For FY23, disbursement expanded by 80 per cent YoY at Rs 49,500 crore.