Mahindra & Mahindra Financial Services has successfully allotted ₹1,250 crore through non-convertible debentures (NCDs) on September 29, 2026, as reported by Business Standard. The company had received board approval on September 24, 2026, to raise funds up to ₹2,000 crore through NCDs on a private placement basis. The allotment comprises 125,000 NCDs with a face value of ₹1 lakh each, issued at par to identified investors. The securities are designed as Secured, Rated, Listed, Redeemable Non-convertible Debentures with a specific maturity profile and are proposed to be listed in the wholesale debt segment of BSE Ltd.
The ₹1,250 crore issue comprises a base issue of ₹1,000 crore along with a green shoe option of additional ₹250 crore. The NCDs carry a fixed coupon rate of 7.95% per annum and will mature on September 28, 2029. The securities offer a tenure of two years and 364 days (or 1,095 days) from the date of allotment. The pay-in amount was based on bid prices on the electronic bidding platform, with the company paying coupons of ₹7,950 per debenture on September 29, 2027 and September 29, 2028, along with the final coupon payment of ₹7,928.22 per debenture on September 28, 2029, along with the principal amount of ₹1 lakh per debenture. The proposed securities offer a conservative approach to collateralization with 1.1x security cover on receivables.
Prabhudas Lilladher highlighted the company's significant technology transformation during its transformation tour covering central processing center (CPC) and dealership operations. The research report dated September 25, 2026, revealed that digitalization has shortened the customer journey dramatically, with first-offer turnaround time reduced to approximately 20 minutes from 6-7 days earlier. Normal cases are now processed within less than 1 hour with same-day disbursement capabilities. The company's proprietary 30+ years of repayment data and 40 risk cohorts support granular underwriting, while digital collections have reached 70-75% of total collections. Technology remains a key enabler of operating leverage, with further benefits expected from AI-led processing, collections, risk-based pricing and cross-sell initiatives.
The company reported robust financial results for the April-June quarter of FY27, with standalone net profit surging 70% year-on-year to ₹898.65 crore compared with ₹529.50 crore in the same period last year. According to reports, the NBFC's net profits witnessed healthy growth supported by increased revenues from interest collected, fees and commissions earned. Interest income advanced 11% YoY to ₹4,620.87 crore for the reporting quarter, against ₹4,164.59 crore in Q1 FY26.
Prabhudas Lilladher has recommended an 'Accumulate' rating on Mahindra & Mahindra Financial Services with a target price of ₹350. The research report dated September 25, 2026, maintains an unchanged multiple of 1.5x September 2028 P/ABV, arriving at the target price of ₹350. The brokerage expects further benefits from AI-led processing, collections, risk-based pricing and cross-sell initiatives, positioning the company for continued growth in the digital lending space.
