M&M Financial Services has announced the complete utilization of the Rs 2,996.16 crore raised through its rights issue conducted from May 22 to June 6, 2025. This development marks a significant milestone for the company in strengthening its capital base and supporting its business activities.

Utilization of Funds

According to the monitoring agency report by CARE Ratings Limited for the quarter ended September 30, 2025, the funds have been deployed as follows:

The report confirms that there has been no deviation from the stated objects of the rights issue. The company has utilized the proceeds in accordance with the Letter of Offer dated May 8, 2025, with no variations in fund utilization.

Breakdown of Fund Utilization

Long-term Capital (Rs 2,250 crore)

This significant portion of the funds has been allocated to meet the funding requirements for M&M Financial's business activities. This injection of capital is expected to strengthen the company's ability to expand its lending operations and support its growth initiatives.

General Corporate Purposes (Rs 738.17 crore)

This amount has been used for various corporate purposes, including repaying liabilities and interest payments. The flexibility of this allocation allows the company to address its immediate financial needs and optimize its balance sheet.

Issue-related Expenses (Rs 7.99 crore)

This amount covered the costs associated with the rights issue process.

Implications for Investors

The full utilization of the rights issue proceeds within the stipulated timeframe demonstrates M&M Financial's commitment to its growth strategy and efficient capital management. Investors can take confidence from the fact that the funds have been deployed as per the stated objectives, with no deviations reported by the monitoring agency.

Regulatory Compliance

The submission of the monitoring agency report complies with the regulatory requirements set by the Securities and Exchange Board of India (SEBI). This transparency in fund utilization helps maintain investor trust and adheres to good corporate governance practices.

Conclusion

The successful deployment of the Rs 2,996.16 crore raised through the rights issue positions M&M Financial Services well for its future growth plans. With a strengthened capital base, the company is better equipped to pursue its business objectives in the competitive financial services sector. Investors and stakeholders will likely keep a close watch on how this capital infusion translates into business performance and value creation in the coming quarters.

M&M Financial Services has reported robust financial results for the second quarter of fiscal year 2026, demonstrating significant growth across key metrics.

Financial Highlights

• Total Revenue: Rs 4,472.67 crore, up 14% year-on-year
• Net Profit: Rs 569.31 crore, a substantial increase of 54% compared to Q2 FY25
• Assets Under Management (AUM): Rs 1,27,246 crore, growing 13% year-on-year
• Disbursements: Rs 13,514 crore, a 3% increase from the previous year

Improved Asset Quality

The company's asset quality showed improvement, with Gross Stage 3 assets at 3.9% compared to 3.8% in the same quarter last year. The Net Stage 3 assets stood at 1.89%, indicating effective management of non-performing assets.

Capital Adequacy and Liquidity

M&M Financial Services maintained a strong capital position with a Capital Adequacy Ratio of 19.5%, well above regulatory requirements. The company's liquidity coverage ratio stood at a comfortable 346%, ensuring ample liquidity to meet short-term obligations.

Segment Performance

The tractor segment showed exceptional growth, while the commercial vehicle and construction equipment segment faced some challenges.

Management Commentary

Raul Rebello, Managing Director & CEO, stated, "Our Q2 performance reflects the strength of our diversified business model and our ability to capitalize on market opportunities. The significant growth in net profit and improvement in asset quality demonstrate the effectiveness of our strategic initiatives."

Future Outlook

With a strong balance sheet and improved asset quality, M&M Financial Services is well-positioned to capitalize on the growing demand for financial services in rural and semi-urban India. The company continues to focus on digitalization and expanding its product offerings to drive sustainable growth.

Investors and analysts will be watching closely to see if M&M Financial Services can maintain this momentum in the coming quarters, especially given the evolving economic landscape and competitive pressures in the non-banking financial sector.