M&M Finance shares decline 6% after releasing Q2FY25 business update

M&M Finance share price: Shares of M&M Finance slipped after the company said it expects a 1% decline in overall disbursement in the September 2024 quarter

M&M Finance share price: Mahindra and Mahindra Financial Services shares slipped over 6 per cent on Friday, October 4, and registered an intraday low at Rs 301.55 per share on BSE after the company released its Q2FY25 business update.

At around 9:27 AM, shares of M&M Finance were down 6.24 per cent at Rs 302.05 per share on the BSE. In comparison, the BSE Sensex was trading 0.36 per cent lower at 82,199.57 around the same time.

In an exchange filing released on Thursday after market hours, M&M Finance had said that it expects the overall disbursement in Q2FY25 to decline 1 per cent year-on-year (Y-o-Y) to Rs 13,160 crore. However, it pegged the H1FY25 disbursement at Rs 25,900 crore, a growth of 2 per cent Y-o-Y.

Meanwhile, the company's business assets are pegged at Rs 1.13 crore, showing a growth of 20 per cent in the September quarter from the year-ago period. Its collection efficiency (CE) is anticipated to remain flat at 96 per cent Y-o-Y for the quarter ended September 30, 2024.

Collection efficiency is a metric that measures how well a company or institution collects its debts and loan repayments.

As per the company's exchange filing, as of September 30, 2024, Stage 3 delinquency is estimated at 3.8 per cent, compared to 4.3 per cent a year ago, while Stage 2 delinquency is estimated at 6.4 per cent, compared to 5.7 per cent Y-o-Y.

M&M Finance's liquidity chest for the quarter under review could come to over Rs 8,500 crore, the company added. The company's board on Thursday also approved the offer and issuance of Non-Convertible Subordinated debentures on a private placement basis.

The issue size is Rs 750 crore and 75,000 debentures will be issued at a face value of Rs 1,00,000, it added.

The tenure of the debenture is nine years and 363 days from October 8, 2024. The fixed coupon rate is set at 8.24 per cent per annum.

In the past one year, shares of M&M Finance have gained 4.2 per cent, compared to the BSE Sensex's rise of 26.4 per cent during the same period.