Mahindra & Mahindra Financial Services has approved the proposal to raise up to Rs 3,000 crore through a Rights Issue, to augment the NBFC's Tier I capital by over 200 bps, the company informed through an exchange filing on February 13.
Shares of MMFSL has sharply higher by over 3% after the announcement was made public.
The NBFC said it sees 'tremendous growth opportunity' with regard to India’s domestic consumption growth, going forward, and the capital raise will support the company's growth aspirations for next few years.
MMFSL added that it expects to benefit from India’s growth through its well-diversified product offering, and has planned to augment capital to strengthen the balance sheet.
Track MMFSL's December quarter earnings here.
The December quarter saw a comeback of growth, said MMFSL, led largely by the Farm business and Passenger Vehicle segment. Tractor saw a 24% on year growth while PV sales saw a 8% growth. "This is on the back of what we could call as revival in the underlying industry as well as our efforts to improve coverage in dealerships and geographies," the management said during the December quarter earnings call in January.
By the end of the March quarter, MMFSL plans to share a holistic plan on AI use cases, which will be a 'detailed roadmap' for the next 3-4 years, to unlock value and revenue from different pools. Many of the long-term initiatives that the company is planning is to achieve a certain size and scale, with a loan book of over Rs 1.15 lakh crore.
By the end of Q4FY25, MMFSL plans to share details on overall growth aspirations, digital AI capabilities.
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