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.

 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.
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