IFC invests 125 million dollars in Mahindra Group companies

May 19, 2017

International Finance Corp. (IFC), the investment unit of World Bank Group is planning to invest 125 million dollars in two financial services companies of the Mahindra Group.  IFC will invest 100 million dollars in Mahindra & Mahindra Financial Services Ltd (MMFSL), the non-banking financial company (NBFC) run by Mahindra group and another 25 million dollars in Mahindra Rural Housing Finance Ltd (MMFSL) through a subscription of non convertible debentures (NCDs).

These investments by the IFC are aimed to provide finance for affordable housing in rural and semi-urban areas of India by MRHFL whereas MMFSL will use the money to supply lending to the agricultural division and to finance agricultural equipment.

MMFSL is a publicly listed subsidiary of Mahindra and Mahindra Ltd (M&M) which is India’s largest tractor and utility vehicle manufacturer. It provides loans for cars, tractors, tractors and utility vehicles, mainly in rural and semi-urban areas. M&M holds 51.2% in MMFSL. Mahindra & Mahindra Financial Services Ltd has financed over 47 million customers and it has 1,182 branches in India.

Mahindra Rural is a unit of Mahindra Finance.  MMFSL currently holds 87.5 per cent stake in the company and rest 12.5 per cent is held by National Housing Bank. The company provides loans for home construction, extension, purchase and improvement to customers in rural and semi-urban India. It has more than 350 branches in 10 states.

"Providing asset finance to agro related small & micro business will enable them expand their operations and create more employment opportunities. Availability of tractors and other farm equipment will support mechanization of agriculture and improved farm productivity and efficiency and boost production. “IFC said. 

IFC has been investing in quite a few Indian mortgage lenders. IFC announced it would invest 200 million dollars in India’s largest mortgage lender Housing Development Finance Corp. Ltd by subscribing to five-year NCDs or masala bonds Recently, IFC disclosed its plans to invest 200 million dollars in mortgage lender HDFC and 150 million dollars in Bajaj Finance via NCDs.

 

May 19, 2017

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