InvestorQ : Can you tell me about the latest results for Jun-20 and the proposed rights issue of M&M Financial Services?
Priyanka N made post

Can you tell me about the latest results for Jun-20 and the proposed rights issue of M&M Financial Services?

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Dawn Cherian answered.
3 months ago


In the case of M&M Financials, it is quite surprising that despite good results the company is coming out with a rights issue at half the price. it probably shows severe liquidity crunch in the company.

Again I notice this person, Saurabh Prabhu, spamming and promoting his personal website on this discussion forum. This is not the forum for promoting such blogs. Please remove such posts as they disturb the flow.


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NISHA Nayak answered.
3 months ago


M&M Financial reported net profits of Rs.432 crore for the Jun-20 quarter, representing a 4-fold jump in profits over the Jun-19 quarter. Total consolidated income of the company also increased by 8% percent to Rs.3069 crore during the Jun-20 quarter. The sharp increase in profits was achieved through cost rationalizations and cost optimization to a large extent.

Apart from the stellar results, M&M Financials also announced fund-raising to the tune of Rs.3089 crore via the issue of 61.78 crore rights shares. The issue price of the rights has been fixed at Rs.50 per share a steep 50% discount to the CMP. The full amount will be payable on application. The record date for the rights issue will be July 23.

The rights entitlement ratio will be in the ratio of 1:1, which means the total equity base will double post the rights issue. This will lead to the outstanding shares of M&M Financial expanding to 123.55 crore shares post the rights. M&M Financials also reported 14% surge in AUM to Rs.81,346 crore. This money chest will help capitalize on post COVID growth.


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Saurabh Prabhu answered.
3 months ago


I have presented my views on the rights issue. I believe the existing investors should either increase their stake/certainly invest in the right issues or exit the stock completely. It does not make sense to hold onto the stock without subscribing to the rights issue. It is a good step by the company to ensure minimum dilution and also raising funds to fend against the losses due to Covid-19. You can check the justanotherinvestor site for the views.