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Mahindra & Mahindra raises Rs 1,000 crore via non-convertible debentures

The NCDs, which are proposed to be listed on the Wholesale Debt Market (WDM) segment of the BSE, offer coupon of 6.65 per cent per annum

Mahindra & Mahindra raises Rs 1,000 crore via non-convertible debentures

On April 17, M&M's board had approved allotment of NCDs worth Rs 1,000 crore through private placement route

Mahindra & Mahindra Ltd (M&M) on Monday said it has allotted 10,000 unsecured redeemable non-convertible debentures (NCDs) of the face value of Rs 10 lakh each for Rs 1,000 crore on private placement basis. The NCDs are rated, listed, unsecured and redeemable with a coupon or yield of 6.65 per cent payable annually, and principal on maturity.

"On the basis, the successful bidding done through the BSE BOND-EBP Platform, the company has today allotted 6.65 per cent 10,000 numbers of rated, listed, unsecured, redeemable Non-Convertible Debentures of Rs 10,00,000 each for cash at par, aggregating Rs 1,000 crores on private placement basis," M&M said in a filing to the Bombay Stock Exchange (BSE).

The NCDs are proposed to be listed on the Wholesale Debt Market (WDM) segment of the BSE. These bonds have a tenure of three years and hence redemption of proposed NCDs is set on April 20, 2023.

On April 17, the automaker's board had approved allotment of non-convertible bonds worth Rs 1,000 crore through private placement route. The company, however, did not disclose the reasons for raising the capital.

The listed companies are raising fund via bonds after the Reserve Bank of India (RBI) last month decided to provide additional liquidity in the system to help borrowers dealing with the economic damage caused by coronavirus pandemic. Last week, Mukesh Ambani's Reliance Industries, Tata Steel and state-owned NTPC also announced plan to raise fund via NCDs.

In a bid to maintain stability in the financial system in the wake of COVID-19 outbreak, the RBI on March 27 introduced the Targeted Long Term Repo Operations (TLTROs), as a tool to enhance liquidity in the system, especially the corporate bond market. The central bank plans to lend as much as Rs 1 lakh crore under TLTRO to counter the large sell-offs in the domestic equity, bond and forex markets caused by the coronavirus crisis.  

Meanwhile, shares of M&M were trading at Rs 357.05 apiece, down 1.69 per cent from the previous close at 14:00 hours on BSE. The stock hit an intra-day high and low of Rs 369 and Rs 354.20, respectively, after opening higher at Rs 368 apiece.

By Chitranjan Kumar

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