Mahindra & Mahindra Fin. Ser. Ltd NCD 2016

Mahindra & Mahindra Financial Services Ltd. Non-Convertible Debenture (NCD)

with Coupon (interest) rate up to 9% p.a.

 Credit Rating : ‘CARE AAA (Triple A)’ by CARE and ‘IND AAA’ by India Ratings.

mm logo Mahindra & Mahindra Fin. Ser. Ltd NCD 2016

 Company Profile

  • Mahindra & Mahindra Financial Services Limited (MMFSL) was incorporated in 1991 and commenced operations as a finance company in 1993. MMFSL was registered as a deposit-taking NBFC in 1998 and has since established a pan-India presence, spanning 26 states and 5 union territories through 1,167 offices as of March 311, 2016.
  • MMFSL is one of the leading non-banking finance companies (“NBFCs”) with customers primarily in the rural and semi-urban markets of India. MMFSL is part of the Mahindra group, which is one of the largest business conglomerates in India.
  • MMFSL primarily engaged in providing financing for new and pre–owned auto and utility vehicles, tractors, cars and commercial vehicles. MMFSL also provide housing finance, personal loans, financing to small and medium enterprises, insurance broking and mutual fund distribution services.
  • MMFSL primarily focuses on providing financing for purchases of auto and utility vehicles, tractors, cars, commercial vehicles and construction equipment’s and pre-owed vehicles and others which accounted for 30.4%, 14 .7%, 22.3%, 11.2% and 21.44% of estimated total value of the assets financed, respectively, for the year ended March 31, 2016.
  • MMFSL commenced its housing finance business through subsidiary Mahindra Rural Housing Finance Limited (MRHFL). MMFSL provide housing loans to individuals through, MRHFL, a registered housing finance company, in which NHB presently owns a 12.5% equity share capital of MRHFL. MRHFL grants housing loans for purchase, construction, extension and renovation of house property.
  • On standalone basis, as of March 31, 2016, MMFSL maintained a NPA coverage ratio of 61.7%, net NPA of 3.2 % of total assets, capital adequacy ratio of 17.3%, total loans and advances outstanding of Rs.36657.75 crores and total assets of Rss.39579.48 crores.
  • Source: Shelf Prospectus dated May 17, 2016 and Tranche 1 Prospectus dated May 17, 2016 Disclaimer: Invest only after referring to the Shelf Prospectus and Tranche 1 Prospectus

Strengths

  • Knowledge of rural and semi-urban markets

MMFSL has over 20 years of operating experience primarily in rural and semi-urban markets, which has led to a significant understanding of local characteristics of these markets and has allowed them to address the unique needs of their customers. MMFSL has adapted to markets that are affected by limitations of rural infrastructure and has developed a diversified customer base of farmers, car-owners, transport agencies, small businessmen and home-owners.

  • Extensive network of offices

MMFSL operate an extensive network of 1179 offices spanning across 25 states and 5 union territories, as of December 31, 2015. The reach of offices allows them to service their existing customers and attract new customers as a result of personal relationships cultivated through proximity and frequent interaction by their employees. MMFSL widespread office network reduces their reliance on any one region in India and allows them to apply best practices developed in one region to other regions.

  • Brand recall and synergies with the Mahindra group

M&M, their Promoter and the flagship company of the Mahindra group. M&M has been selling automotive and farm equipment in semi-urban and rural markets for over 6 decades. The Mahindra group is one of the largest business conglomerates in India and has a strong presence in utility vehicles, tractors, information technology, financial services, aerospace, real estate, and hospitality and logistics sectors.

  • Access to cost-effective funding

MMFSL believe that they able to access cost-effective debt financing due to their strong brand equity, stable credit history, superior credit ratings and conservative risk management policies. Historically, MMFSL has secured cost-effective funding from a variety of sources. MMFSL maintains borrowing relationships with several banks, mutual funds and insurance companies.

  • Experienced management team

MMFSL has an experienced management team, which is supported by a capable and motivated pool of employees. MMFSL’s senior managers have diverse experience in various financial services and functions related to their business. MMFSL’s senior managers have an in-depth understanding of the specific industry, products and geographic regions they cover, which enables them to appropriately support and provide guidance to their employees.

ISSUE SALIENT FEATURES

  • Effective Yields range from 8.60% per annum to 9.00% per annum depending on the category of investors and option applied for
  • Credit Rating of ‘CARE AAA’ by CARE and “IND AAA” by India Ratings.

  • Issuer: Mahindra & Mahindra Financial Services Limited
  • Type of instrument/ Name of the security : Unsecured Subordinated Redeemable Non-Convertible Debentures
  • Mode of the issue : Public issue Tranche 1 Issue Size Base Issue Size of 250 crore with an option to retain oversubscription upto the Shelf Limit, i.e. upto  1000 crore
  • Issue Size:  250 crore Option to retain Oversubscription Amount Upto the Shelf Limit, i.e. upto  1000 crore
  • Issue Price (in Rs) /Face value Rs 1,000 per NCD
  • Pay-in date Application Date. The entire Application Amount is payable on Application.
  • Step up/ Step down interest rates:  Not Applicable
  • Interest type:  Fixed Coupon Rates
  • Interest reset process : Not Applicable
  • Issuance mode of the instrument*:  Physical and demat
  • Day count basis:  Actual / Actual
  • Listing : The NCDs are proposed to be listed on BSE.
  • Modes of payment:  1. Direct Credit: 2. NECS: 3. RTGS: 4. NEFT: 5. Registered Post/Speed Post:
  • Trading mode of the instrument:  In dematerialised form only
  • Issue opening date:  Wednesday, May 25, 2016
  • Issue closing date: ** Friday, June 10, 2016
  • Credit Rating: The NCDs proposed to be issued under this Issue have been rated ”CARE AAA” for an amount of  1,00,000 lacs, by CARE and “IND AAA” for an Credit ratings amount of 1,00,000 lacs, by India Ratings.
INVESTMENT DETAILS
Series I II III IV V VI VII VIII IX
Issue Price & Face Value of NCDs (` / NCD) ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000
Frequency of Interest Payment Quarterly Quarterly Quarterly Annual Annual Annual Cumulative
Tenor (in months) 66 84 120 66 84 120 66 84 120
Minimum Application Size & thereafter in multiple of Minimum 10 and 1 thereafter
Coupon (% per annum) for Category I and II 8.34% 8.44% 8.53% 8.60% 8.70% 8.80% NA
Coupon (% per annum) for Category III and IV 8.44% 8.53% 8.72% 8.70% 8.80% 9.00%
Redemption Amount (`/NCD) Category I & II ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000 ` 1,000 1574.75 1793.52 2325.36
Redemption Amount (`/NCD) Category III & IV 1582.75 1805.11 2368.49
Effective Yield (per annum) for Category I and II 8.60% 8.71% 8.80% 8.61% 8.70% 8.80% 8.60% 8.70% 8.80%
Effective Yield (per annum) for Category III and IV 8.71% 8.80% 9.00% 8.71% 8.80% 9.00% 8.70% 8.80% 9.00%

 

Application Process and Form Submission/Collection Centers

Please take print of the Application Form A4 paper size.

Click here to download Application form of M&M Finance Services Ltd NCD May 2016

Attach following document along with the application form : –
1] PAN Card and Address Proof Photo Copy attested by applicant.
2] One Cancelled Cheque copy.
3] Bidding is mandatory.
4] Cheque / DD should be drawn in favour of “MMFSL NCD I Public Issue – Escrow Account”.
5] On First come First Serve Basis
6] Keep photocopy of application form for your record.
7] Submit / deposit your NCD application form in Listed/ Design Bank Branches after bidding. (Click here to see your city)
8] To record and track the status/allotment of your application form, send us the soft copy Application Form/ Acknowledgement Slip.
9] The actual bond will reflect in your demat account within 8-12 weeks time form date of allotment.
10] Free Home Service available *

Who Can Apply/Invest

Public Financial Institutions, Statutory Corporations, Commercial Banks, Co-operative Banks and Regional
Rural Banks, Public/private charitable/religious trusts, Scientific and/or industrial research organisations, Resident Indian individuals; Hindu Undivided Families through the Karta.

Applications cannot be made by:
a) Minors without a guardian name*;
b) Foreign nationals, NRI inter-alia including any NRIs who are (i) based in the USA, and/or, (ii) domiciled in the USA, and/or, (iii) residents/citizens of the USA, and/or, (iv) subject to any taxation laws of the USA;
c) Persons resident outside India;
d) Foreign Institutional Investors;
e) Foreign Portfolio Investors;
f) Qualified Foreign Investors;
g) Overseas Corporate Bodies; and
h) Persons ineligible to contract under applicable statutory/regulatory requirements.
* Applicant shall ensure that guardian is competent to contract under Indian Contract Act, 1872

Profits & Dividend

M & M Finance Profit & Dividend

Years
Profit Before Tax
Profit After Tax
Dividend %
2015125364.4083177.59200
2014134576.8488722.75190
2013127919.8888269.18180
201292525.662011.67140
201170244.8246310.92100
201052056.8543270.73.75

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