Mahindra Finance approves Rs 2,000 crore NCDs at 8.45%

Mahindra & Mahindra Financial Services Limited approved up to Rs 2,000 crore of secured non-convertible debentures, or NCDs, on 11 November 2026 at a fixed 8.45% annual coupon, with redemption due on 26 September 2029. The private-placement programme includes a Rs 750 crore base issue and a Rs 1,250 crore greenshoe option.

What did Mahindra Finance approve on 11 November 2026?

Mahindra Finance approved the offer and issuance of up to 2 lakh secured, rated, listed and redeemable NCDs through private placement. Its Debenture Issuance Committee approved the proposal at 3:30 p.m. Indian Standard Time on 11 November 2026, acting under authority granted by the board and within shareholder-approved borrowing limits.

The maximum issue size is Rs 2,000 crore, comprising a Rs 750 crore base issue and an additional Rs 1,250 crore greenshoe option. The filing does not state how much of the maximum amount will ultimately be allotted, nor does it identify investors in the proposed issuance.

Each NCD carries a face value of Rs 1 lakh, so the proposed maximum of 2 lakh debentures corresponds with the Rs 2,000 crore ceiling. The pay-in amount will be based on bid prices on the Electronic Bidding Platform, and the NCDs are proposed to be listed on BSE Limited's Wholesale Debt Market segment.

What are Mahindra Finance's NCD coupon and maturity terms?

Mahindra Finance set a fixed coupon of 8.45% per annum for NCDs with a tenure of two years and 314 days from the deemed allotment date of 16 November 2026. The instruments mature on 26 September 2029, when principal of Rs 1 lakh per debenture is scheduled for redemption.

The first coupon is due on 26 September 2027 and covers 314 days, with a payment of Rs 7,269.32 per debenture. The second and third coupons are both Rs 8,450 per debenture, payable on 26 September 2028 and 26 September 2029 respectively; the lower first payment reflects its shorter stated coupon period.

The NCDs are redeemable and non-convertible, meaning the disclosed payment schedule consists of cash coupon payments and principal repayment rather than conversion into equity. The final 26 September 2029 payment date combines the third scheduled coupon with the Rs 1 lakh principal redemption per debenture.

How will Mahindra Finance secure the NCD issue?

Mahindra Finance said the NCDs will carry an exclusive charge in favour of the debenture trustee over assets equal to 100% of the outstanding debentures. The security may cover present or future receivables from loan contracts, hire-purchase contracts and lease contracts, as well as owned assets and book debts.

The company said the assets selected for the charge will be free from encumbrances. Mahindra Finance will create the appropriate security in favour of the debenture trustee within the time frame prescribed by applicable law, although the 11 November 2026 filing does not give a specific security-creation date.

The filing marks special rights, interests and privileges attached to the instruments as not applicable. It also records no letters or comments about payment or non-payment of interest or principal, or other matters related to the proposed security and its underlying assets, for this Series AF2026 fresh issuance.

What happens if Mahindra Finance misses an NCD payment?

Mahindra Finance would pay additional interest of 2% per annum above the 8.45% coupon for any period in which it defaults on a coupon or principal payment. The provision applies when payment is not made on the scheduled due date.

The additional interest is a default-payment condition and does not change the ordinary 8.45% fixed coupon under the stated payment schedule. Coupon dates are 26 September in 2027, 2028 and 2029, while the Rs 1 lakh principal amount is due only on 26 September 2029.

The company disclosed the payment-default mechanism in its issue terms rather than reporting a payment event. The filing also marks cancellation or termination of the issuance proposal as not applicable as of the approval date of 11 November 2026.

How does the base issue compare with the greenshoe option?

Mahindra Finance's Rs 1,250 crore greenshoe option is Rs 500 crore larger than its Rs 750 crore base issue. If the full option is used, it would represent 62.5% of the Rs 2,000 crore maximum programme, compared with 37.5% for the base issue.

The structure permits issuance above the base amount, up to the approved Rs 2,000 crore limit. However, the filing does not confirm subscription demand, the final allotment amount or whether Mahindra Finance will use all or part of the Rs 1,250 crore greenshoe option.

This is a private placement rather than a public offering, and the proposed listing is on BSE's Wholesale Debt Market segment. Although the NCDs are described as rated, the filing does not identify a rating agency or disclose the assigned rating.

Conclusion

Mahindra Finance has authorised a secured private-placement NCD programme of up to Rs 2,000 crore at a fixed 8.45% annual coupon. The programme combines a Rs 750 crore base issue with a Rs 1,250 crore greenshoe option, while providing security over eligible unencumbered receivables, owned assets and book debts equal to 100% of outstanding debentures.

The next disclosed event is the deemed allotment date of 16 November 2026, followed by the first coupon payment on 26 September 2027. The unresolved matter is the final amount allotted, including whether Mahindra Finance uses any or all of the Rs 1,250 crore greenshoe option.