Mahindra &Mahindra Financial Services is completely in the focus today. Two news – first is the earnings for Q1FY21 which came in good and second, a rights issue.

Earnings – its consolidated net profit for the quarter jumped up 300% (YoY) from Rs.108 crore to Rs.432 crore. This was on a totak consolidated income of Rs.3069 crore, up 8%.

The AUM is at Rs.81.436 crore, up 14% (YoY).

In terms of asset quality, Gross NPA rose to 9.19% v/s 8.17% (YoY) while Net NPA came down to 5.72% from 6.27%.

Due to the pandemic, it has provided an additional charge of Rs 477 crore (pre-tax) in the standalone financial statements and Rs 664 crore (pre-tax) in the consolidated financial statements for the quarter. Its provisions and write-offs for Q1 stood at Rs.8427 crore, up 36%.

Rights issue – its opens on 28th July and closes on 11th August. The rights is for raising Rs.3089 crore and 61.78 crore equity shares are on offer at a price of Rs.50 per share (FV of Rs.2). The entire issue price will be payable at the time of making the application.

The company has fixed the rights entitlement ratio at 1:1 – one equity share for every one share held by the eligible equity shareholders of the company, as on the record date -23rd July.

The stock price opened almost 10% higher at Rs.228 and then came off this days high and is now trading at Rs.217, up some 4.5%.