M&M Financial jumps 9% after NBFC raises Rs 500 crore through secured bonds

NEW DELHI – Shares of Mahindra and Mahindra Financial Services surged 8.6 per cent in early trade Wednesday after the NBFC said that it had raised an amount aggregating Rs 500 crore by issuing secured bonds.

A meeting of the committee of the board was held on Tuesday, February 15, 2022, approving the allotment of 5,000 secured redeemable non-convertible debentures aggregating to Rs 500 crore.

The counter rose to a high of Rs 166.85 as against Rs 153.65 at the previous close on the National Stock Exchange.

The tenure of the bonds is 2 years and 365 days from the deemed date of allotment of the bonds, which is February 15, 2022, reports said.

According to reports, the bonds are set to mature on February 14, 2025. The bonds will bear an interest rate at benchmark plus spread per cent payable annually. The spread is 1.65 per cent per annum.

The spread will remain constant during the tenor of the instrument; Mahindra Finance was quoted as saying in reports.

In the third quarter of the current financial year, the company had posted a consolidated net profit of Rs 992 crore, lower than Street estimates. M&M Financial Services had reported a consolidated net loss of Rs 223 crore in the same period a year ago.

Despite the third-quarter earnings falling short of market expectations, several analysts are bullish on the stock, with CLSA, earlier this month, retaining an 'outperform' call with a target at Rs 240 per share, reports said.