Mahindra and Mahindra Financial Services NCD Review

MMFSL (Mahindra and Mahindra Financial Services Ltd) commenced its journey two decades ago in the rural non-banking finance industry. The company was incorporated in the year 1991 and ranked among top non-banking finance companies. The focus areas of M n M are rural and semi-urban parts of the country. Their vision is concentrated on the transformation of rural and semi-urban India into flourished and a self-reliant landscape. The company’s commitments are towards the empowerment of every individual with resources to help their dreams see the light. M n M engaged in the business of financing pre-owned utility and auto vehicles, car, tractors, and commercial vehicles. Besides the above financing, they also provide SME financing, personal loans, insurance broking, mutual fund distribution services etc. Within a short time span, the company is going to release NCD (Non-Convertable Debenture). This content will cover the topic Mahindra and Mahindra Financial Services NCD Review.

Let’s start with the issue details of the company.

Mahindra and Mahindra Financial Services Issue Details

  • The issue opens on- Jan 4, 2019
  • The issue close on- Jan 25, 2019
  • Issue Type: Fixed Price Issue NCD
  • Face value: Rs. 1000 Per NCD
  • Issue size: 35,000,000 NCD’s of Rs.1000
  • Market lot: 1 NCD
  • Issue size: Rs.3,500.00 Crore
  • Listing At: BSE
  • Issue price: Rs. 1000 Per NCD
  • Minimum order quantity: 10 NCD
  • DRHP: Click here

Objectives of Issuing NCD

  • The company decides to utilize the fund through the financing, lending and refinancing the existing indebtedness.
  • Collection of Long-term working capital is also one of the objectives of issuing NCD.
  • General corporate purposes like brand name, image are the common purposes of issuing NCD.
  • In comparison to the convertible debenture NCD (non-convertible debentures) has the high-interest rate.
  • Apart from the above issue, there is a purpose like the financial emergency.

About Mahindra and Mahindra Financial Services

  • If we divide the company’s services into broad sections, there are Loans, Investment categories. Under the loan category, they provide services like Vehicles Loans, personal loans, home loans, SME loans. In the investment sections, there are fixed deposits, mutual funds, bonds, insurance.
  • Vehicles loan includes tractor loans, utility, car, three-wheelers, commercial vehicles, two wheelers, pre-owned cars.
  • SME loans consist of project finance, equipment fin, corporate loans, secured business loans, working capital, bill discounting, lease rental discounting, financial advisory, insurance solutions.
  • In 2004, the company started an insurance broking business through their subsidiary.
  • In the year 2016, it ranked 68th among 781 employers surveyed in India. The company also ranked 5th in the Indian financial services. In the workplace transformation case study, it has ranked 3rd position.

Financial Products of the Company

Mahindra and Mahindra Financial Services limited

The financial products include:

Loans

Vehicle Loans

  • Tractor loans
  • Utility vehicles loans
  • Car loans
  • Three Wheeler loans
  • Commercial Vehicles loans
  • Two wheeler loans
  • Pre-owned car loans

Investment

  • Fixed deposits
  • Mutual funds
  • Bonds
  • Insurance

Competitive Strengths

Their competitive strengths are as follows:

  • The company’s extensive network of offices is one of the strengths. It operates a network of 1,296 offices which are spanning across 27 states and 5 union territories (as of 2018 30th September). The extensive network allows them to serve the customers properly. Their geographic diversification not only allows to serve different customers but also helps to enrich the company’s value.
  • Knowledge of rural and semi-urban markets lead the company to the next level. Over 20 years of operating experience lead to a significant understanding of the local characteristics of these markets.
  • They believe they get to benefit from their Effective use of technology, streamline company-wide approval and administrative procedures.
  • The company’s strong customers and dealers relationship develop the strengths.
  • Synergies with Mahindra group maintain the company’s efficiency level.
  • They have a well-fund management team which leads the company to cost-effective funding.
  • The company has an experienced management team.

Company Strategy

  • One of the main reasons behind the focus point of rural and semi-urban markets is to grow their market share.
  • Effective use of technology also falls under the company strategies.
  • The company has diversified product portfolio fulfill various financial needs of the customer.
  • Their innovative strategy attracts and retains talented employees.

Company Promoter

The company’s promoter was incorporated as the name of Mahindra & Mohammed Limited. Later the name was changed to Mahindra & Mahindra Limited on January 13, 1948.

Registered Office

4th Floor, Mahindra Towers,
Dr. G.M. Bhosale Marg, P.K. Kurne Chowk, Worli, at Mumbai – pin 400 018

Management Team

Chairman and Independent Director- Mr. Dhananjay Narendra Mungale

Vice-Chairman and Managing Director- Mr. Ramesh Iyer

Executive Director and Chief Financial Office- Mr. V Ravi

Non-Executive Non- Independent Director- Mr. V S Parthasarathy

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Independent Director- Mr. Chandrashekhar Bhave

Independent Director- Mr. Manohar Gopal Bhide

Independent Director- Mr. Piyush Gunwantrai Mankad

Independent Director- Mrs. Rama Bijapurkar

Non-Executive Non-Independent Director- Dr. Anish Shah

Financial Statement

In order to analyze Mahindra and Mahindra Financial Services NCD Review financial statement is necessary.

mahindra and mahindra financial services ncd review

Mahindra and Mahindra Financial Services NCD Review

Now, come to the main section of the content Mahindra and Mahindra Financial Services NCD Review. The above data is taken from the profit-loss statement of the company. It displays a hike in the profit in the last FY18, before that in 2017-18 it earns the lowest profit among the past 5 years. It is a well-established company with a strong financial background.

The company prospectus (draft red herring prospectus) reveals the fundamental ratios of the company. The market cap of the company is 28,760.05. P/E ratio is at the level of 28.10. EPS is 16.57 and book value is 162.84. Based on our analysis Mahindra and Mahindra Financial Services NCD Review carries a POSITIVE view. The NCD or non-convertible debenture is a long-term investment opportunity.



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