Mahindra & Mahindra Financial Services gets overwhelming response for QIP

Mahindra & Mahindra Financial Services Limited has successfully concluded the capital-raising exercise of Rs. 426.26 crores through the issue of 61,33,205 Equity Shares at a price of Rs. 695 per equity share including a premium of Rs. 685 per equity share which is a 3.4% premium to the SEBI Floor Price of Rs. 672.75 a share. The Company received bids of approximately over Rs. 1,575 Crores.

Despite it being launched in markets clouded by bearish sentiments, the first Qualified Institutions Placement (QIP) offering, an important capital market initiative by the Company, received an overwhelming response, as seen by the high-levels of subscription and strong participation from International Institutional Investors. Post the QIP issue, Mahindra & Mahindra Limited, the parent Company will hold fifty-six percent of the shareholding in the Company. The new shares issued under QIP will be listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).

Kotak Mahindra Capital Company, Citigroup Global Markets India Private Limited and JM Financial Consultants Private Limited acted as the book-running lead managers for this QIP. The funds raised will be effectively deployed to augment the long term resources by way of enhancing the Tier I capital base, leverage the available business opportunities, provide funding for loans to the Company's customers and for general corporate purposes. The Company's capital adequacy which was at 17.37% as of December 31, 2010 will be further enhanced post the QIP issue.

Source : Equity Bulls

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