Personal Finance Blog India –

Mahindra & Mahindra Financial Services Subordinated NCD Issue May 2016:

Noted Non-banking finance company – Mahindra Finance which is promoted by Mahindra & Mahindra will soon come up with an issue of subordinated , unsecured NCDs.

Issue Size: Mahindra Finance will raise Rs.250 crore through this issue with an option to retain over subscription up to Rs.1000 crore.Company may issue one or more tranche of issues.

Company will utilize the issue proceedings for lending,financing,refinancing existing indebtedness,long term working capital & general corporate purpose.

About MMFSL :

Mahindra finance provides finance mostly in rural areas for Agricultural / allied activities & auto sector.

MMFSL is listed company at BSE and NSE promoted by Mahindra & Mahindra.

Profit After Tax history & other financials of MMFSL is as below:


Above table shows snapshot of Sales,Operating profit,Gross profit and net profit of company for last 05 years.

Performance of company mostly depends on rural economy and in turn factors like monsoon,performance of agricultural sector etc.  Agricultural  /allied , Auto  comprises of more than 90% of companies loan portfolio.


  • MMFSL NCD Issue Imp dates:
  1. Issue open date:May 25, 2016
  2. Issue close date:June 10, 2016.


  • Interest rates for individual investors :Investors have different investment options like – Quarterly , annual interest & Cumulative.

Quarterly Interest payout:

Interest will be paid quarterly accumulated from date of allotment.

Mahindra & Mahindra Financial Services NCD May 2016 Quarterly interest payout

Annual Interest Payout:

Interest will be paid out annually.

Mahindra & Mahindra Financial Servives NCD May 2016 Annual Interest Payment


Interest and principal amount will be paid at maturity.

Mahindra & Mahindra Financial Servives NCD May 2016 Cumulative Option

Other details:

  1. Credit Rating:CARE AAA & IND AAA which indicates highest safety.
  2. Mode of holding:NCDs can be held in physical or demat mode.
  3. Face value: Rs.1000.
  4. Min application amount : Rs.10,000/-
  5. High Networth Individual : Investor applying for more than Rs.5 lakh will be treated as HNI investor.
  6. Listing : @ BSE only.
  7. No call or put option : Investor will able to sell NCDs only in secondary market.
  8. TDS : Provision of Tax Deduction at Source will be applicable for physical mode of holding if interest paid / accrued is crossed the threshold limit of Rs.5000.One can submit appropriate form like 15G / 15H to avoid TDS. No tax will be deducted at source if NCDs are held in demat form.

Though NCDs are subordinated,unsecured,Tier-II, one can invest small part of fixed income portfolio in this issue.

Mahindra Finance also accepts public deposits .Click Here for details and interest rates offered by Mahindra & Mahindra Financial services.


Is Your Mutual Fund Record Up To Date:

Ramesh has some very old mutual fund investment made decade ago.As at that time, even pan number was not compulsory , there were no mobile phones, signatures are changed over a period of time.

so now when he need some money, he is running to prove his identity to asset management company.This happens as he do not keep / update his mutual fund record up to date.

If it is recent investment then there are high chances that all records have updated.But if this is old folio and you haven’t made any updates then check your record for following.

  1. Update nomination:In 2011,SEBI introduced new rules about mutual fund nomination.Number of folios created before 2011 do not have nominations as it is ignored aspect.Check whether you have made nomination or not.If there is no nomination then legal heirs may need to do some additional work like court order for transmission.
  2. Update NEFT / Epayout :Check whether payout mode is electronic or not.Its better if money is directly get credited in bank ccount Investor just need to provide then a simple form and cancelled copy of cheque to update e-payout.
  3. Update KYC: KYC is mandatory for new investments but old folios may have invalid addresses.So complete KC formalities.For this you need a simple KYC form, PAN copy and address proof.
  4. Signature: check whether your signature have changed significantly in recent years or if there is change in signature after marriage. Then update your signature through kyc form.If there is signature mismatch then investor may need to provide bankers attestation each time to update financial / non-financial transactions.
  5. Add multiple bank accounts : Attach 2-3 active bank accounts in your folio so that at time of redemption you can use appropriate & convenient account.One can not update or add bank account at time of redemption.

So its always better to keep record up to date as

  • It minimizes risk of fraud.
  • Leads to smooth transactions like switch,purchase and redemption.
  • Leads to easy dividend payouts if opted.
  • It leads to easy transmission.

Number Of Mutual Fund Units & Its Significance:

Recently one of well known finance professional Manoj Nagpal conducted online poll about significance of number of units.The poll was like this:

number of Mutual Fund Units significance

In fact there are 2 ways to look at the aspect about number of mutual fund units.

Aspect 1:

Consider SIP in two different funds having different NAVs

  • Consider Fund 1 with NAV : 10.
  • Consider Fund 2 with NAV: 400.


  1. Here Fund 1 can get more number of units than Fund 2.
  2. But as Fund 2 can outperform fund 1, ultimate valuation will be higher for Fund 2 despite having lower number of units.
  3. so for this aspect number of units  will irrelevant and ultimately fund performance will be important.

Aspect 2:

Investment in single  fund suppose Franklin Prima Fund:

then just for example, for 04 last installments number of units accumulated will be like this:

Franklin Prima Fund

  1. See the units indicated in Green colour.
  2. Due to NAV dip investor have received some what more units which becomes relevant when NAV is now 677.
  3. So Number of units accumulated are relevant here for Aspect 2.


  1. Number of units are irrelevant when we compare two funds having two different NAVs.
  2. Number of units are relevant when talk about investment in same fund..Units bought at higher level or lower level can affect the number of units and in turn fund value.
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