The share price of Mahindra & Mahindra Financial Services rallied over 5 percent on Tuesday as the company’s rights issue worth Rs 3,088.8 crore opened today.

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The stock gained 5.16 percent to hit an intraday high of Rs 135.50 apiece on the BSE. At 11:20 am, the shares were trading 3.92 percent higher at Rs 133.90 apiece.

The company has issued 61.78 crore fully paid-up equity shares of the face value of Rs 2 each at a price of Rs 50 per equity share aggregating to Rs 3,088.82 crore on a rights basis.

“The funds raised through the Issue will be used to repay/prepay certain outstanding borrowings of the company, augment long term capital and resources for meeting funding requirements for the company’s business activities and for general corporate purposes,” the company said in a release.

The equity shares will be offered in the ratio of one equity share for every one equity share held by the eligible equity shareholders of the company as on the record date, that is July 23, 2020, it added.

Also Read: BOTTOMLINE: Between Mahindra Finance and Shriram Transport, whose rights offer should you go for?

The rights issue will close on August 11, 2020.

Kotak Mahindra Capital Company Limited, Axis Capital Limited, BNP Paribas, Citigroup Global Markets Private Limited, HDFC Bank Limited, among others are appointed as the lead managers to the rights issue, it said.

Last week, the company reported robust earnings for the quarter ended June 2020, registering a 300 percent rise in the net profit to Rs 432 crore as against Rs 108 crore during the corresponding quarter last year.

Total consolidated revenue increased by 8 percent to Rs 3,069 crore as compared to Rs 2,838 crore, YoY.

The standalone assets under management (AUM) as on June 30, 2020, rose 14 percent to Rs 81,436 crore as against Rs 71,406 crore, YoY.

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First Published:Jul 28, 2020 11:39 AM IST