M&M Financial board approves raising up to ₹3000 crore via rights issue; stock gains 4%

The board of non-banking finance company, Mahindra & Mahindra Financial Services, on Thursday, February 13 approved raising ₹3,000 crore by way of rights issue of shares to the eligible shareholders of the company.

"The Board of Directors of the Company, at its meeting held today i.e. on February 13, 2025, has interalia considered and approved fundraising by way of offer and issuance of fully paid-up equity shares of the company of face value of 2/- each for an amount not exceeding ₹3,000 crore by way of a rights issue to the eligible equity shareholders of the company as on the record date," M&M Financial Services said in an exchange filing today.

The company will communicate the record date at a future date.

Via the fundraising, M&M Financial Services primarily looks to augment its Tier 1 capital. This capital raise will enhance Tier-1 Capital by more than 200 bps enabling growth aspirations for the next few years, as per the company.

"Further, the Board or the Rights Issue Committee of the Board will, inter-alia, decide the terms and conditions of the Rights Issue, including but not limited to the appointment of intermediaries, determination of the issue price, Rights entitlement ratio, record date, timing of the rights issue and terms of payment and other related matters," the exchange filing added.

Stock Price Impact

Following the fundraising announcement, shares of M&M Financial Services gained 4% to hit the day's high of ₹287 apiece.

M&M Financial Services stock opened at ₹279.95, higher than its previous close of ₹279.95 per share. Thereafter, it extended gains to the day's high of ₹287.

Despite a sharp drawdown in the Indian equity benchmarks - Sensex and Nifty 50 - in the last one month, shares of M&M Financial Services are up 3% during this period. Even in the last three months, the stock has risen 7%. However, it has shed 5% in the last six months.

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