M&M Finance gains 2% on plans to enter life, general insurance space
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For the quarter ended September, Onward Technologies net sales were at Rs 87.09 crore.
Shares of Mahindra and Mahindra Financial Services Limited traded 2.4 percent higher to Rs 296 in early trade on December 15 after the company said it plans to enter the life, health and general insurance space to diversify its sources of income.
“The company proposes to undertake the supplemental business activity of soliciting and procuring insurance business as a Corporate Agent (composite) in the areas of life, health and general insurance- both group and individual,” the NBFC said in an exchange filing on December 14.
At 9:28am, the counter was trading at Rs 292, up 0.7 percent from the previous close, on the National Stock Exchange. In the last month, the stock has gained 5 percent.
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Mahindra Finance, involved in the vehicle lending business, said that entry into such insurance segments will also be subject to obtaining necessary approval from the Insurance Regulatory and Development Authority of India (IRDAI) and no objection from the Reserve Bank of India and other regulatory authorities.
The non-banking financial company will seek shareholders’ nod through a special resolution, it said in the exchange filing.
As for initial costs, Mahindra Finance will invest Rs 5-10 crore in the new insurance businesses, mainly towards technology set-up, manpower hiring and training and certification costs.
The company anticipates that the net fee income from these new segments could constitute approximately 0.1 percent to 0.2 percent of its standalone average assets over the next 1-3 years.
As one of India’s prominent vehicle and tractor financiers, the company provides personal and commercial lines insurance. Additionally, it is a significant player in small business lending and housing finance.
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