Mahindra ldeal Finance's Rs 1 Bn Debut Debenture lssue Oversubscribed on day 1

Mahindra Ideal Finance Limited (MIFL) has announced the successful conclusion of its debut Rs 1 Billion debenture issue, which was oversubscribed on the first day of opening, marking a significant capital market milestone for one of Sri Lanka’s fastest-growing licensed Non-Banking Financial Institutions.

The Issue comprised up to Ten Million (10,000,000) Tier 2, Listed, Rated, Unsecured, Subordinated, Redeemable Debentures at a par value of LKR 100 per Debenture, raising up to Sri Lanka Rupees One Thousand Million (LKR 1,000,000,000), with a five-year tenure maturing in 2031.

Commenting on the outcome, MIFL Managing Director/CEO, Mufaddal Choonia said the proceeds of the Company’s inaugural debenture issue will be deployed to strengthen lending capacity across its core business segments, including vehicle leasing, gold loans, SME loans, and business loans.

“The success of our first debenture issue is testament of our performance so far and speaks of the confidence that investors have placed in our future growth story.

The strong market response is also the best validation we can secure from the investor community on the strong fundamentals that underpin our business.

We will honor that trust by deploying these funds to further provide accessible credit to enrich the lives of our customers and for the communities we serve.”

The capital raise also strengthens the Company’s Tier 2 capital base in compliance with the Central Bank of Sri Lanka’s Capital Adequacy Requirements.

The Debentures were offered in two structures — Type A, at a fixed rate of 12.00% per annum payable annually, and Type B, at a floating rate of the 364-Day Treasury Bill rate plus 3.50% per annum payable semi-annually.

The Issue carried a credit rating of A (lka) from Fitch Ratings Lanka Limited, with MIFL holding an entity rating of AA-(lka) with a Stable Outlook.

The Issue was managed by NDB Investment Bank Limited, with Bank of Ceylon serving as Joint Placement Agent.

About Mahindra Ideal Finance Limited

Mahindra Ideal Finance Limited is a licensed Non-Bank Financial Institution regulated by the Monetary Board of the Central Bank of Sri Lanka under the Finance Business Act No. 42 of 2011 (PB 4963).

Originally established in 2012 as Ideal Finance Limited, the Company entered into a joint venture with Mahindra & Mahindra Financial Services Limited (Mahindra Finance), India, in 2019, and was rebranded to Mahindra Ideal Finance Limited in 2022.

MIFL combines Mahindra Finance’s 25 years of expertise in serving rural and emerging markets with the Ideal Group’s deep Sri Lankan roots and local market knowledge.

The Company offers multi-brand vehicle leasing, loans, gold loans, and fixed deposits through a network of 37 branches nationwide.

Fitch Ratings Lanka Limited has assigned the Company an entity rating of AA-(lka) with a Stable Outlook.