Auto major Mahindra & Mahindra Ltd (M&M) on Friday 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. This is the second bond issue by the company within a week's time.
The NCDs are rated, listed, unsecured and redeemable with a coupon or yield of 6.65 per cent payable annually and principal on maturity.
"In furtherance of our letter dated April 23, 2020, we wish to inform you that basis the successful bidding done through the BSE BOND-EBP Platform, the company has today allotted 6.78 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 on Friday.
The NCDs are proposed to be listed on the Wholesale Debt Market (WDM) Segment of the BSE, the automaker said.
Earlier on Monday, the tractor and SUV maker had listed similar-rated, unsecured, redeemable NCDs worth Rs 1,000 crore on the BSE at a coupon rate of 6.65 per cent per annum. The bonds were assigned "IND AAA" rating with a stable outlook by India Ratings & Research.
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. Earlier this month, Mukesh Ambani's Reliance Industries, Tata Steel and state-owned NTPC and many others 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.
In a separate development, the board of M&M on Thursday subscribed to 288 Compulsorily Convertible preference shares of Sampo Rosenlew Oy, Finland, an associate of Sampo, a leading player in combine harvesters' market. The total acquisition cost was around Rs 23.61 crore (Euro 28,79,712).
The investment is intended to consolidate M&M's presence in combine harvesters in the global markets, which is in furtherance to the main line of business of the company. Post-acquisition of CCPS, Sampo would continue to remain an associate of the company, it said.
Meanwhile, shares of M&M were trading at Rs 337.40 apiece, down 2.92 per cent from the previous close at 14:30 hours on BSE. The stock hit an intra-day high and low of Rs 344.80 and Rs 335, respectively, after opening lower at Rs 344.80 apiece.
By Chitranjan Kumar