Mahindra & Mahindra (M&M) share price tumbled nearly 6% in early trade today, February 21, following an announcement regarding fundraising plans by its subsidiaries. The company, in an exchange filing on February 20, announced the board’s approval for rights issues worth Rs 4,500 crore.
The share price of M&M is currently trading at Rs 2,662.25, a 6.24% decline in the early trading hours today.
Fundraising Plan of M&M Subsidiaries
Two key subsidiaries of Mahindra Group, Mahindra & Mahindra Financial Services Ltd (MMFSL) and Mahindra Lifespace Developers Ltd (MLDL), have received board approval to raise funds through rights issues.
MMFSL plans to raise up to Rs 3,000 crore, while MLDL aims to secure up to Rs 1,500 crore.
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Mahindra & Mahindra Financial Services Limited (MMFSL), one of India’s leading non-banking financial companies, reported a standalone revenue stood at Rs 13,404 crore, while its consolidated revenue reached Rs 15,797 crore for the year ending March 31, 2024. MMFSL’s net worth was reported at Rs 18,157 crore (standalone) and Rs 19,933 crore (consolidated).
Meanwhile, Mahindra Lifespace Developers Limited (MLDL), the real estate arm of M&M, recorded a standalone revenue of Rs 18.69 crore and a consolidated revenue of Rs 212.09 crore for the same period. The company’s net worth stood at Rs 1,541.60 crore (standalone) and Rs 1,789.84 crore (consolidated).
Nomura: Buy on M&M, sees 30% upside
The brokerage firm Nomura has maintained a ‘Buy’ rating on Mahindra & Mahindra (M&M), identifying it as the top pick in its OEM coverage universe. The brokerage has set a target price of Rs 3,681 per share, indicating a potential upside of nearly 30% from current levels.
As per Nomura, M&M is currently trading at 12x FY27 EV/EBITDA (adjusted for subsidiaries), compared to its peers, which are valued at 12-14x.
On the company’s electric vehicle (EV) business, Nomura noted that M&M’s battery electric vehicle (BEV) sales of 4,000-5,000 units per month translate to a 10-15% market share in the segment. “This is a fairly strong number,” the brokerage stated, adding that demand could rise further with positive customer feedback. “We believe MM has the potential to take the No. #1 position in BEV revenue market share in FY26,” Nomura said.
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