Mahindra Finance Approves ₹2,000 Crore NCD Issue at 7.95%

Mahindra & Mahindra Financial Services Limited approved a private placement of secured non-convertible debentures of up to ₹2,000 crore at a fixed 7.95% annual coupon, comprising a ₹1,000 crore base issue and a ₹1,000 crore green shoe option, with the instruments due to mature on September 28, 2029.

What did Mahindra Finance approve?

Mahindra Finance approved the offer and issuance of secured, rated, listed and redeemable non-convertible debentures, or NCDs, through private placement. The approval was granted by the Debenture Issuance Committee, which has been authorised by the board of directors, at its September 24 meeting.

The proposed issue has an aggregate size of up to ₹2,000 crore. It includes a ₹1,000 crore base issue and an option to retain an additional ₹1,000 crore through the green shoe option. The approval is within Mahindra Finance's overall borrowing limits approved by shareholders and the authority delegated by its board.

What are the terms of the ₹2,000 crore NCD issue?

Mahindra Finance plans to issue up to 2,00,000 NCDs with a face value of ₹1 lakh each, carrying a fixed coupon of 7.95% a year. The instruments will be listed on the Wholesale Debt Market Segment of BSE Limited.

The deemed date of allotment is September 29, 2026, and the maturity date is September 28, 2029. The tenure is 1,095 days, or two years and 364 days, from the allotment date. The pay-in amount will be determined using bid prices on the electronic bidding platform.

How will Mahindra Finance service and secure the debentures?

Mahindra Finance will make annual coupon payments of ₹7,950 per debenture on September 29, 2027, and September 29, 2028. The final coupon payment of ₹7,928.22 per debenture is due on September 28, 2029, together with the ₹1 lakh principal repayment for each NCD.

The NCDs will be secured by an exclusive charge in favour of the debenture trustee over present and future receivables under loan contracts, hire-purchase and lease arrangements, owned assets and book debts. The security cover is stated at 1.1 times the outstanding debentures. If there is a default in payment of coupon or principal on the due date, Mahindra Finance will pay additional interest at 2% a year above the stated coupon for the period of default.

How does this issue compare with Mahindra Finance's recent borrowings?

The latest approval follows other NCD fund-raising actions by Mahindra Finance. In April 2026, the company approved a secured NCD issue of up to ₹1,000 crore, consisting of a ₹500 crore base size and a ₹500 crore green shoe option, at a fixed coupon of 7.71% a year.

That April 2026 instrument had a tenure of two years and 334 days, with allotment scheduled for April 28, 2026, and maturity on March 28, 2029. Earlier, in February 2025, Mahindra Finance approved an NCD issue with a ₹300 crore base size and a green shoe option of up to ₹200 crore. These transactions show the company has continued to use privately placed debt instruments within its approved borrowing framework.

What does the NCD approval mean for investors and operations?

The approval gives Mahindra Finance access to debt funding of up to ₹2,000 crore, subject to the final issuance under the private-placement process. The fixed coupon and defined maturity schedule set the interest cost and repayment timeline for this proposed borrowing. The disclosed terms do not specify how the proceeds will be deployed.

For investors, the key points are the maximum issue size, 7.95% coupon, secured structure and September 2029 repayment date. The BSE Wholesale Debt Market listing provides a listed platform for the securities. The approval itself is a borrowing decision and does not represent an equity issuance or a stated change in the company's share capital.

Conclusion

Mahindra Finance's approval of up to ₹2,000 crore in secured NCDs adds a defined debt-funding facility with a 7.95% fixed annual coupon and a 1,095-day tenure. The structure combines a ₹1,000 crore base issue with an equal green shoe option, while security is backed by specified receivables, assets and book debts.

The next disclosed milestones are the deemed allotment on September 29, 2026, the annual coupon payments in 2027 and 2028, and principal repayment with the final coupon on September 28, 2029. Investors can monitor the final amount allotted under the approved issue and any subsequent disclosures on the use of proceeds.