Shares of Mahindra & Mahindra Ltd. fell over 6% on Friday following the company’s announcement that it would invest in the proposed rights issues of its subsidiaries, Mahindra & Mahindra Financial Services (MMFSL) and Mahindra Lifespace Developers (MLDL).
The board of M&M Financial Services has approved raising up to Rs 3,000 crore through a rights issue, while Mahindra Lifespace Developers plans to raise up to Rs 1,500 crore via a similar route.
According to an exchange filing, M&M Financial Services will offer and issue fully paid-up equity shares of face value Rs 2 apiece, not exceeding Rs 3,000 crore.
With a sharp fall in provisions and healthy growth in its loan book, M&M Financial Services reported a 63% year-on-year rise in its net profit for the quarter ended December, amounting to Rs 899 crore. However, the asset quality worsened, with stage 3 assets rising to 3.9% in December from 3.83% a quarter ago, and net stage 3 assets increasing to 2.0% from 1.59% a quarter ago.
