The company was initially incorporated in 1991 as Mahindra Finance, a non-banking financial company (NBFC), by M&M, the majority shareholder, along with Kotak Mahindra as a strategic investor. In 1998, M&M bought out Kotak Bank stake and it became its wholly owned subsidiary MMFSL . M&M holds 51.2 % stake in the company.
MMFSL is the largest financier of M&M’s vehicles providing financing to about one-fourths of total sales of M&M. This activity accounts for 48% of MMFSL’s total financing. Its key subsidiaries include Mahindra Rural Housing Finance Ltd (MRHFL) and Mahindra Insurance Brokers Ltd (MIBL). In August, 2015, Tech Mahindra Ltd, along with Mahindra Finance, received in-principal license from Reserve Bank of India for setting up a payment bank and this is expected to commence operations in 2017.
|State Bank of India||Government Bank Benchmark||7.25% – 7.50%(7.75%)|
|ICICI Bank||Private Bank Benchmark||7.40% – 7.50%(7.9%)|
- Other smaller private Banks like Ratnakar Bank & recently formed Bandhan bank offer 8.75% maximum(9.25% for senior citizens)
- Max. Rates for other banks are DCB 8.1% (8.6%) , IDFC Bank 8% (8.5%) , Yes 7.75% (8.25%), IDBI- 7.75%(8.25%), Axis 7.5%(8%) , BOB 7.3% (7.8% )
- Post office is 7.9% (compounded Qtrly)
- FD of FAAA rated company Bajaj Finance offer 8.9% interest max for period of 24-60 months.
- LIC HF offers maximum of 8.5% on 5 year FD scheme
- Housing Development Finance Corporation offers 8.4% on FD.
- Dewan Housing finance (DHFL) . FAAA FD offers 8.75% for upto 10 year period.
- MMFSL FD schemes offer rates of 8.45% for tenures of 1-5 years
- NCDs due to listing are more liquid than FDs.
- Recently issued Tax free Bonds of IREDA, HUDCO, IRFC, NHAI are being priced at a YTM(Yield to Maturity) of 7.1%. The older tax free bonds( 8.1%, 8.8% etc.) have YTM in range of 6.65%-6.9%
- Tax free return from MMFSL NCD issue for 10%, 20% and 30% Tax bracket comes out to be 8.1%, 7.2%, 6.3% respectively.
- AAA rated taxable bonds of NTPC & SBI are trading at a YTM of 8.28% and 7.93% respectively with good liquidity.
- AA or AA- Bonds trade at 9-10.5% YTM range and many are not very liquid
- Senior Citizen scheme offers 9.3% for five years, but is restricted (no OD) and interest rates are pegged each year and thus can go down.(already down to 8.6 % for ICICI)
- PPF offers 8.1% tax free p.a. but rates are subject to revision from time to time.