Bus120 Final Group Project

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BUS120 Final Group Project
Essentials of Marketing (University of the Fraser Valley)
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SEPTEMBER 3, 2018
BUS120: Essentials of Marketing

Monday Class: 9:30-12:30
CRN: 91686
Marketing Term Project
Group #1
Student Details
Name
Case Study Four
Phone Number Email Address
Priyamvada Grover 9779896000 m47priya@gmail.com
CRN 91686
Angad Rana
Manik Dhir Group #1
8283824260
9873377432
angadrana2121@gmail.com
Monday
dhirmanik007@gmail.com
9:30-12:30
CRN 91686
Monday
Date Submitted: November 19, 2018
9:30-12:30
Due Date: November 19, 2018
com

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1 Final Project- Group 1
Table of Contents
Acknowledgements ............................................................................... 3
Certificate of Originality ......................................................................... 4
Executive Summary .............................................................................. 5
Background ......................................................................................... 6
Target Market ...................................................................................... 7
Customer Behavior Analysis ................................................................. 18
The Firm’s 4Ps ................................................................................... 26
Competition Analysis ........................................................................... 32
Firm’s Differentiation Strategy .............................................................. 34
Firm’s Positioning Strategy .................................................................. 35
Situation Analysis ............................................................................... 37
Conclusion ......................................................................................... 44
Recommendation ................................................................................ 46
Learning ............................................................................................ 47
Bibliography....................................................................................... 48
List of Tables and Figures .................................................................... 48
Appendix ........................................................................................... 64
Annexure......................................................................................... 101
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From the desk of

Prof Shyam Vyas, PhD
Essentials of Marketing Effort, Assistance & Assessment Initiative -
Non-Paying Sponsor Format
_________________________________________________________
Thank you for your note SV/UFV Chandigarh /Bus 120 PROJ/ Fall 18
We agree to sponsor this Essentials of Marketing Effort, Assistance & Assessment Initiative -
- involving (product category) _________________________________________
to be conducted by business students at University of The Fraser Valley, Canada’s
Chandigarh campus - being guided by Dr Shyam Vyas, Ph.D.
Your student coordinator(s) may meet with us as and when required during the
course of this project to take our inputs - depending on the time availability at our
end.
There would be NO financial liability accruing to us as Non-Paying Sponsor of
this project - and we will not be making any payments to the students. We are
agreeing only to give our advice and input as regards the conduct of this marketing
project. There is no liability accruing to UFV as well as a result of our voluntarily
agreeing to be a part of this student led academic exercise.
We would be happy to take the Final Presentation of Report Findings and provide
you with our evaluation of the same.
The venue for Report Findings Presentation will be our office / UFV Chandigarh
campus - on a date and time that is mutually convenient.
Thank you for your Essentials of Marketing Effort, Assistance & Assessment Initiative -
We are looking forward to interacting with your marketing student coordinators.
Authorised Signatory
Name & Designation of Signatory ____________________________________________________
(in capital letters please)
Name & Address of Organisation ______________________________________________________

(in capital letters please)
______________________________________________________________
Phone___________________ Fax _________________Email_________________________________
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Acknowledgements
We are thankful to Dr. Shyam Vyas for giving us such an
interesting and challenging project. Your lectures teach us the
practical approach towards marketing which was really helpful in
analyzing the progress and current situation of the company. You
also tell us to look at things with various perspectives and then
form a strong opinion, which has helped us develop a better and
deeper understanding of the concepts.
We would like to thank Mr. Mayank Batra for his co-operation and
help. It wouldn’t have been possible to complete this project
without him. His inputs have been really valuable in helping us
understand the real-life implications of marketing concepts which
we study in class.
We would also like to thank all the people who have participated
in our surveys and answered our questions. Their answers have
helped us come to concrete conclusions with evidence.
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Certificate of Originality
This is to declare that:
• The words used in this document are our words only.
• We have not copied.
• We have not plagiarized.
• We have cited all sources from where we have quoted or
adapted.
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Executive Summary
Our team started this project with the view to learn more about the real life
and practical situations which the companies have to face in marketing. For
this we chose Mahindra Finance as our non-paying sponsor and started to
learn more about their marketing practices like what are their 4 P’s or how
have they selected their target market. We wanted to know are they
involved in market research or following the core marketing concept as
these are the building blocks and provides direction to the entire marketing
department.
Our team gathered this information from both primary and secondary
sources. We went and talked to the employees working in Mahindra finance.
Under primary data we gathered a lot of information as we went about are
interviews with the employees and secondary data was gathered from
credible websites and various surveys conducted by our team.
In real world it is actually very difficult to meet and talk to people and collect
information about their company and also there is no scope for mistakes in
real world too. Everything has to be done with perfection. But after facing
lots of difficulties the experiences that we gathered from this project would
be valued for life.
The major difficulties we faced were of finding a good non-paying sponsor.
Secondly, everything was kept confidential within the company so it was
very tough to extract information from them. So, a lot of persuasion was
done to finally get the information which we needed but everything was not
fully disclosed.
Our recommendation after careful analysis of both the primary and
secondary data is that the company needs to on advertising and other
promotional strategies since they believe because their established brand
name, promotional strategies is not required. Also, they need to diversify
themselves and explore and expand its target market to urban areas. They
should use sales promotion techniques in order to attract the urban
customers and provide excellent services simultaneously to retain them.
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Background
Mahindra and Mahindra Financial Services Limited are the leading non - bank
finance companies in India. The company was formerly known as Maxi
Motors Financial Services Limited and changed its name to Mahindra &
Mahindra Financial Services Limited in November 1992.
Mahindra Finance's headquarters is located in Mumbai, Maharashtra and it
generates $62K in revenue. Mahindra Finance has raised a total of $100M in
funding. The company’s top competitor is Tata Capital, led by Rajiv
Sabharwal, who is their CEO.
They provide personalized financing for the widest range of utility vehicles,
tractors and cars through a vast network of branches, focusing on the rural
and semi-urban sectors. Rural funding from MMFSL is seen as the
cornerstone of poverty reduction, rural development and inclusive growth in
many parts of the country.
With the majority of our country's population living in rural India, their loans
to more than 10,000 customers belonging to the low - income groups have
proven to be a catalyst for rural India's growth.
The Company also provides for the distribution of mutual funds, fixed
deposits and personal loans. The subsidiary of the company, Mahindra
Insurance Brokers Limited, distributes life and non - life insurance products
by means of links with different insurance firms. It is an Indian
conglomerate subsidiary, Mahindra & Mahindra (M&M). It also provides
personal loans for wedding, children’s education, medical treatment, and
working capital; insurance broking solutions to retail customers and
corporates; investments comprising fixed deposits and mutual fund
distribution; and mutual fund schemes, such as liquid, equity-linked saving,
equity-oriented balanced, and short-term debt schemes.
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Target Market
Product Market:
Mahindra Finance (Mahindra and Mahindra Financial Services Limited,
MMFSL) started primarily as a vehicle financing subsidiary to the company
Mahindra and Mahindra Limited, which is a multinational car manufacturing
company. It is presently one of India’s leading non-banking finance
companies. Mahindra Finance and its subsidiaries offer a complete range of
financial services and insurance solutions for both businesses and personal
life. They now provide a variety of financing services such as Vehicle
Financing, SME financing, Personal Financing, Housing finance, Insurance
broking, Asset management company (mutual funds), Mutual fund
distribution, and Fixed deposits.
Image 1
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Target Market and Segmentation:

Target market is the market segment in which the end consumer lies. To be
in the product’s target market, a consumer needs to have three
qualifications:
1. He has to have a need.
2. He should be willing to satisfy the need
3. He should have the Purchasing power.
If a person has these three things, he is qualified to be a prospective
customer and is considered to be a part of the target market.
Within a target market, there are market segments. These segments allow
us to group similar people together and cater to a particular set of needs in a
certain way. All good market segments have each of the following
characteristics, they are:
1. Homogenous Within
2. Heterogenous Between
3. Substantial in Size
4. Operational and Accessible
Image 2
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Image 3
Market Segmentation can be done on

1. Geographic Base
2. Social Base
3. Demographic Base
4. Psychographic Base
5. Product Base
For Mahindra Finance, the target market is based on a multivariate basis
including all five bases mentioned earlier.
1. Geographic Base
MMFSL targets people from rural areas. The company has branches in
240,000 villages (38% of the total villages in India) and 7000+ towns in all
29 states of the country. Mahindra Finance identified the rural market as an
important focus area. It offered all its services in the rural parts of the
country, often with customization. For instance, local people who were aware
of the ground situation were employed to facilitate rural transactions better.
Other companies did not provide these facilities and hence the differentiation
strategy is evident here.
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2. Social Base
Farmers and business people are the social groups whom Mahindra Finance
targets. They require heavy loans for vehicular equipment (which Mahindra
finance sells) and hence are an important part of the target market for
financing services. A lot of farmers are in the rural area so it goes in line
with the geographical base too.
3. Demographic Base
The demographic basis for segmentation includes the following
1. First time workers and adults
Their purchasing power increases and their needs for financial services
evolve.
They may require less overdrafts
They may be able to get more credit
Demand for long-term residential loans may increase
2. Ageing population
Their needs for financial services change, due to changes in their income and
in their lifestyle
Income usually falls after retirement (they may be less able to get high
credit)
Discretionary time increases (they may be more open to travel loans)
They usually own their home (demand for residential loans may decrease)
Health becomes a high priority (demand for life insurance may increase)
4. Psychographic Base
Psychographics refer to individuals' internal characteristics, such as
attitudes, beliefs, preferences, knowledge, personality and interests, etc.
Their application in market segmentation is justified by their greater
accuracy in predicting buyer behavior in comparison with demographics or
other uniform market segmentation bases. For example, two people of the
same age may have a different purchasing behavior in financial services due
to differences in their interests, knowledge, attitudes.
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The type of people Mahindra Finance targets is:

A. Minimalists
They have low level of confidence and tend to be only infrequent users
of basic banking services.
B. Capital accumulators
They are the most financially active segment and are frequent users of
credit cards.
C. Apathetic minimalists
Average users of financial services, they are likely to have shares.
They tend to trust financial adviser
D. Financially confused
They are the least financially active segment. They never tend to save
or use credit cards. They pay bills in instalments.
E. Cautious investors
Very active financially, they have a tendency towards lower risk
savings and investment products.
F. Traditionalists
High level of confidence and high level of respect for banking
authority. They tend to use a full range of financial services.
5. Product Base
The company offers a variety of products. Their product category is
Financing Services but they provide Vehicle Financing, SME financing,
Personal Financing, Housing finance, Insurance broking, Asset management
company (mutual funds), Mutual fund distribution, and Fixed deposits. They
divide customers on the base of the service they require (or would require)
as discussed, a little in Psychographic Base.
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Table 1
Other Variables that can be used for segmentation:
Consumer specific Situation specific

Observable Cultural variables User status
Geographic variables Frequency of use
Demographic variables Brand-loyalty
Socio-economic
variables
Unobservable Psychographics Benefits
Personality Perceptions
Lifestyle Attitudes
Preferences
Intentions
Table 2
Benefits of Market Segmentation

By excluding certain segments, a financial institution focuses its efforts and
resources on a smaller target and acquires a deeper understanding of the
needs of that target. It reduces costs by allowing a closer match of corporate
resources with the requirements of a segment. It enhances customer
satisfaction by more accurately addressing customer requirements, which in
turn enhances customer retention, as target segments see that they are
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valued by a firm. The odds of target segments that regard the financial
institution as a brand are increasing. It allows the financial institution to
anticipate changes in the purchasing behavior of the target market and to
respond with new offers in good time. It allows the financial institution to
identify target segments that are small but have great potential, i.e. niche
segments.
Drawbacks of not Segmenting your Target Market

Customers with different requirements are approached with the same
financial service, the same pricing, a standardized communications policy
and an uncompromising service delivery process Customer satisfaction
decreases sharply Customer retention becomes more severe, new customer
acquisition rates decline. Customers perceive the organization to have a
product orientation rather than a Marketing Orientation.
Survey
We conducted a small survey in order to figure out whether the selected
target market for Mahindra Finance is correct or not. We contacted our
relatives who we know would probably take loans and should belong to
Mahindra Finance’s target market as suggested by our research. The results
for the survey have been shared below. All the completed questionnaires are
towards the end of the project report.
Graph 1
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Graph 2
Graph 3
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Graph 4
Graph 5
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Graph 6
Graph 7
Graph 8
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Graph 9
Graph 10
Graph 11
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Customer Behavior Analysis

Consumer Buying behavior is the sum total of the attitudes, preferences,
intentions and decisions of a consumer when purchasing a product or
service. Consumer Behavior helps the marketer to understand the mindset
of the consumer i.e. what the consumer aspires, what services is will attract
him etc. to provide him with an experience that would further help to retain
the customer for a long period of time. What drives consumers to choose a
particular product in relation to others is an issue that marketers often
analyze and study. It is quite evident that majority of the decision are based
on Emotions and reasoning specially in case of a Financing company like
Mahindra Finance. The consumer behavior not only helps to understand the
past but also predict the future trends of the customer.
As far as Mahindra and Mahindra Finance is concerned it is considered to be

consumer product rather than a business product because loans that the
Mahindra and Mahindra provide are basically taken by consumers rather
than businesses. Business generally prefer to take loan for a banking
organization rather than a non-banking finance company. As far as
consumer is concerned who 10 years from now used to rely on the banks for
loan going through a cumbersome process, they had no option but to wait in
long lines and for a long period of time to get their loan sanctioned that too
by filling up hundreds of forms and still their loan was rejected on the basis
of credit worthiness. Also, unlike NBFC, banks used to give loans only to
those who had current savings account and were earning a good amount of
salary since they were the one who could prove that they had the money to
pay off the principal along with the interest. As told earlier Banks like ICICI,
HDFC tend to Target Corporate as well as retail sector however Mahindra
Finance are more geared towards the retail sector financing loans for
vehicles, consumer loans etc. Mahindra finance generally do not finance big
industrial projects.
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We conducted a survey for to understand if people were more interested

towards the Banking sector or NBFC and what is there point of view of
Mahindra Finance.
Graph 12
For the convenience of the research we divided the age brackets into 4
major categories i.e. 17-15,26-35,35-50,50 and above. The responses are
as follows: -
1. As far as the age factor is concerned the graph clearly depicts that people
from the age group 35-50 are the ones who take most of the loans because
during this time they are working class people who need money and at the
same time they can easily pay off the principal and the interest through their
salary.
2. Also it was seen from individual responses that People from 17-25 years
of age generally take education loans rather than any other kind of loans to
finance their education.
3. When we talk to some students we observed that their parents will take
the loans and then the students will repay it when he starts working.
4. Banks and NBFC can target people from 35-50 since they are the final
decision maker since they are the ones who earn the family.
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5. 31.4% of the respondents were among the age bracket of 50 years and
above years which is again a big potential age bracket to target.
Graph 13
A direct question was asked to our

respondents about where did they take loans from and the graph clearly
indicates that most people almost 1/3rd of the people prefer taking loans
from banks rather than NBFC because of the trust, branding and
convenience. People generally establish a trust with the bank they have
account in and if any loan has to be taken they find it easy to just approach
the bank rather than going to some other NBFC. Although Banks dominate
the loan market yet NBFC are coming with different schemes and offering
relaxation to the customers in terms of Return on investment.
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Graph 14
As seen in the previous question people generally prefer banks over NBFC.
As far as banks are concerned the major share is with HDFC and ICICI
banks. And as far as the Non-Banking financial companies are concerned
Mahindra finance and Muthoot Finance has the lowest share and the reason
for this is discussed in the upcoming competitive analysis. One of the NBFC
is SHRIRAM Transport company and Bajaj transport company which provides
automobile loans at a low interest rate.
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Graph 15
34.3 % of the respondent preferred to take an automobile loan,25,7 %

preferred to take Loan home loans, only 11.4% respondent showed interest
in Personal loans and business loans
A large amount of loan is also taken for education of the children of the
respondents and is generally taken by people from age bracket 36-50 and
50 above. As far as loan against property is concerned we did not find even
a single individual who has taken loan against proper among the 35
Respondents. Thus, to conclude people mostly invest in Home loans and
Automobile loans.
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Graph 16
We segregated difference factors which customer consider while taking loan

or financial services, such as loan amount, Processing Fees, loan service
provider and Interest rates. The most important factors which the customer
consider while taking the loan is the Interest Rate. 97% of the respondents
preferred Interest rate over any other factor. 40% votes were given to the
loan service provider and 28.6% to processing fee, which means that if
NBFC are competitive in terms of Interest rate, they too can attract a large
customer base to sell their financial products.
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Graph 17
Taking a loan from home is much easier said than done. Although every
bank and financial institution is eager to lend in today's scenario, it can be a
difficult task to get a loan sanctioned. A whopping 37.1% vote was given to
apply the loan through a mortgage broker with multiple loan options
according to the requirements of the customer and at the convenience of
time and place for them. 37.1% of respondents prefer to apply the loan
directly to their banks in order to save brokerage without an intermediate
interim. 25% of the votes were given to the online application process,
where the respondent wanted to compare and apply online. Online
comparison and application will be based on the growing technology in the
coming period online comparison and application will take over all the other
preference to apply loans.
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How have customers changed over the years?
10 years from now people were more inclined towards the banks to take
loans from since they felt that it was more dependable and safer to take
loans from but over the years the scenario has completely changed. With
many non-banking companies coming into the picture offering interest rates
lower than the banks has attracted a lot of customers.
As far as Mahindra finance customers are concerned, they usually focused on
salary class people during the start of the company but eventually they
realized the needs for loans of low-income class people and came up with
different strategies over the years one of them was financing two wheelers
which definitely attracted a lot of customer base because India has the
highest population of people using two wheelers. As far as Mahindra is
concerned they sold over 2 crore units last fiscal year which was more than
any of the two-wheeler producing companies Thus, there was a change in
trends from customer back then to the customers now. Apart from this since
Mahindra finance is not under the ambit of RBI as a result they have less
restriction to lower their rate of interest. The non-bank lender will be looking
to get its share in the fast growing but a crowded two-wheeler financing
market, a decade after its parent Mahindra & Mahindra entered the highly
competitive industry through the acquisition of select assets of Kinetic
Engineering.
As far as rural areas are concerned Mahindra has a huge name in the rural
market. Almost all tractors that farmers in India are generally of Mahindra
company as a result Mahindra Finance being a part of Mahindra and
Mahindra offers finance options to the farmers who cannot afford tractors as
a reasonable rate. Mahindra being the market leaders in tractors already has
a huge customer base as a result Mahindra finance benefits from this.
According to the research done by our group we believe that the Customers
base of Mahindra company is more in rural sectors compared to urban
sectors where people generally prefer financing through banks rather than
NBFC. Also, it was important for Mahindra finance to rule in rural sectors
where people generally have this believe that if they go to banks they may
have to pay higher rate of interest.
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The Firm’s 4Ps

Marketing Mix:
Marketing mix or marketing controllables consist of 4 P’s of marketing i.e.
Price, Promotion, Place and Product. These are known are marketing
controllables because in this dynamic environment where everything
changes, these marketing controllables are controlled and adjusted by the
company for its success.
Product:
Mahindra finance offers many services which can be categorized under 3
major segments that are Loans, Insurances and Investment opportunities.
All these segments have further categorizations which are as follows:
• Loans:
o Vehicle Loans
o Personal Loans
o Home Loans
o SME loans
• Insurance:
o Motor Insurance
o Health Insurance
o Travel Insurance
o Home Insurance
o Personal Accident Insurance
o Life Insurance
o Group Mediclaim Policy
o Group Personal Accident Policy
o Fire and Marine Insurance
o Office Package Insurance
• Investment Opportunities:
o Fixed Deposits
o Bonds
o Mutual Funds
Mahindra finance has a huge variety of services to offer to its customer and
these are the main categories of products in which Mahindra Finance deals.
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Price:
As Mahindra Finance deals in services related to finance most of the prices of

their services are not fixed for e.g. all loans are subjected to conditions
applied like income, age, family background, regularity and consistency of
income etc. Investment in Bonds and mutual funds depends on the customer
preferences and how much risk they want to take, how long they want to
invest and also in what company they want to invest. The company provides
personal loans for only 3 years and up to ₹ 3,00,000 only.
The rates of fixed rate deposits are as follows:
Dhanvruddhi FD Scheme
Tenure Cumulative Scheme Non-Cumulative Scheme
Interest Effective Interest p.a. Interest p.a.
p.a. Yield p.a. *(Yearly) *(Monthly)
15 8.30% 8.43% 8.30% 7.75%

Months
20 8.35% 8.63% 8.35% 8.00%
Months
27 8.60% 9.10% 8.60% 8.10%
Months
33 9.00% 9.76% 9.00% 8.50%
Months
40 9.00% 10.01% 9.00% 8.50%
Months
Minimum 5,000† 50,000† 50,000†
Amount
*Compounded annually †Additional amount for fresh

deposit in multiple of ₹ 1000
Table 3
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Samruddhi FD Scheme
Tenure Cumulative Scheme Non-Cumulative Scheme
Interest Effective Interest p.a. Interest p.a.
p.a. Yield p.a. *(Half Yearly) *(Quarterly)
12 8.00% 8.00% 7.85% 7.80%

Months
18 8.10% 8.32% - -
Months
24 8.35% 8.70% 8.20% 8.15%
Months
36 8.50% 9.24% 8.35% 8.30%
Months
48 8.50% 9.65% 8.35% 8.30%
Months
60 8.50% 10.07% 8.35% 8.30
Months
Minimum 5,000† 25000† 50000†
Amount
Table 4
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Place:
The headquarters of Mahindra Finance is located in Mumbai, India. Mahindra
finance has over 1000 branches in the country and almost present every
state of India except Jammu and Kashmir and Andaman and Nicobar
Islands. These 100 offices are spread across 1 in every 3 villages in India as
they cater highly to rural areas.
Graph 18
Graph 19
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According to our survey 86.4% people knew about Mahindra Finance

Company and 68.2% have seen their branches and offices.
Promotions:
According to the vision and mission statements of Mahindra Finance, they
are trying to become the leading financial service provider in the rural areas.
Mahindra finance, due their huge brand name of Mahindra, doesn’t do any
advertisements or sales promotion. They take advantage of their huge brand
name which ensures the authenticity and quality of services.
The promotional strategies they use are personal selling. In rural areas, they
usually go for door to door selling in order to persuade their customers by
providing them with knowledge and information of their product.
Graph 20
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Graph 20
Graph 20
According to a survey conducted by our

team, we saw that 86.4% people knew about Mahindra finance and 54.15%
have never seen a Mahindra finance advertisement and 31.8% don’t
remember when they were asked.
But, 89.5% people think that Mahindra Finance’s personal selling tool is
beneficial to them. As people majority of people haven’t seen their
advertisements still they are aware of the company due to its brand name.
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Competition Analysis
Mahindra & Mahindra Financial Services Limited is a non - bank financial
company based in India (NBFC) that deals with the financing needs of rural
and semi - urban communities. It was founded in 1991 and is one of the
biggest tractor finance companies. The company offers a variety of retail
products and services such as the financing of commercial utility vehicles for
commercial use, personal use, tractors etc. The Company also offers,
investments and advisory, fixed deposit schemes and personal loans.
As far as the competition of Mahindra finance is concerned the following
companies give a tough competition to Mahindra Finance are as follows
1.) ICICI Bank

2.) TATA CAPITAL
3.) Hero Finance Group
4.) Fullerton India
5.) Axis Bank
6.) SHRIRAM TRANSPORT COMPANY
After doing the analysis of the competition of Mahindra Finance we found out
that Mahindra Finance has the advantage of brand name of Mahindra &
Mahindra group and also has the largest asset base worth Rs. 5000 crores.
As far as NBFC are concerned we found out that Mahindra finance is one of
the leading companies along with TATA CAPITAL.
Rural Sector
When we talk about Rural financing, Mahindra finance is leading in terms of
sales and revenue and is considered to me Market Leader (as far as NBFC
Is concerned) and TATA Capital is the Market challenger and all other
companies like Bajaj Finance, Muthoot Finance etc. are Market followers.
Mahindra Finance is quite famous in the rural sectors since the tractors of
the company are in huge demand in the market while people in Urban
sectors prefer TATA Capital who is the market leader.
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Urban Sector
Although Mahindra Finance is the Market leader still if we take into
consideration the banks then the company has a long road to walk on. Banks
like HDFC and ICICI are ruling the loan market having the maximum market
share. As far as market share is concerned at present NBFC will 16 %
market share. Also, Mahindra Finance has almost 54% market share in truck
financing dominating the market.
Housing Loan
When the housing loan market is concerned Mahindra, finance is not even
amongst the top 10 and has a negligent market share in this case even in
case of mutual funds. The main reason behind this is the high rate of
interest the company charges.
Table 5
Fixed Deposit
As far as Fixed deposits are concerned Mahindra Finance comes in Top 5
Fixed deposit companies by giving interest of 7-7.55 % while other
companies like Bajaj Finance dominate the market by giving interest rate as
high as 8%-8.55% depending on type of fixed deposit.
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Firm’s Differentiation Strategy

In order to strengthen its presence in the vast rural and semi urban
markets, the management decided to cater to people who did not have bank
accounts and who primarily used cash for all transactions. It helped people
open bank accounts and operate deposits. Mahindra finance developed
custom- made loans with structured repayment patterns suitable for its
borrowers, most of whom were farmers. This way, every customer got what
he or she wanted, and there were not many other firms providing such
customization. The company also moved beyond consumer finance by
setting up units for financing small and medium enterprises. Even though
Mahindra Finance targets the rural areas, it focuses more on catering to
farmers rather than industries. Also, they give huge priority to maintain
customer relationship as many farmers would often come back to get loan
from the company. All local people who are aware of the ground situation
were employed to facilitate rural transactions better. Other companies do
not provide these facilities and hence the differentiation strategy is evident
here.
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Firm’s Positioning Strategy

According to their vision statement that is “To be a leading financial services
provider in semi urban and rural areas” and mission statement “To
transform rural life and drive positive changes in the community”, we
observed that their major target market in rural and semi urban areas. The
Mahindra Finance Company is trying to position itself in the minds of their
target market by providing them with best services and financial facilities.
Mahindra Finance’s unique selling proposition (USP) is their higher rates of
interest it provides for fixed deposits which attracts majority of its consumer.
According, to our survey 42.1% people think that the interest rates on fixed
deposits are high and remaining feel that they are fair. Also, 38.9% have
said that the quality of service is excellent and another 38.9% have said that
the quality of service is good.
Graph 23
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Graph 24
Best Quality Rural Best Interest

Services Market Rates (FD)
Image 4
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Situation Analysis
Market Analysis:
India's varied financial sector is expanding rapidly. The sector consists of
commercial banks, banks, cooperatives, pension funds, insurance
companies, mutual funds and other financial institutions. A fast - growing
economy, rising income levels, higher financial savings, higher spending
propensity and higher life expectancy rates are some of the encouraging
factors likely to boost growth in the sector in the coming years.
In recent years, the Indian Reserve Bank (RBI) has steadily implemented
technology to deepen and expand financial services in India. Innovative
steps have been taken, such as the establishment of small financial banks
and specialized payment banks.
Non-Banking Financial Companies (NBFCs) are an integral part of the Indian
financial system, increase competition, diversify the financial sector and
complement the banking system. The NBFC industry in India has provided
customers in underserved and unbanked areas with credit. Their channeling
of customer savings and investments and the subsequent capital formation
are necessary for the economic growth and development of India.
Their ability to innovate products according to their customers ' needs is well
known. Non-banking finance companies have been gaining market share
across major asset classes, despite increasing competition from banks,
which have sharpened focus on retail loans. The industry’s main competition
is of course, from banks. The credit distribution comparison of NBFC’s and
Banks has been shown below:
Graph 24
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NBFCs increased their share of the total credit market to 16 percent in 2017,
from 13 percent in 2015 according to the rating agency Crisil. The share of
public sector banks (PSBs) has declined from 57 percent in 2015 to 51
percent. Crisil says that PSBs will see their share decline to 47 percent by
2020 in the fight against capital constraints. NBFCs replicating traditional
banking services with innovative products and delivery systems would also
chip away at the share of PSBs. The home loans segment, NBFC 's largest
business segment, is expected to grow at a steady 18 percent CAGR over
the next three years, focusing on self - employed customers and lower ticket
sizes. NBFCs are also planning to increase their market share in wholesale
finance from 12% in 2014 to 19% in 2020. They currently have a market
share of 12% of the total real estate and structured credit segment, which
rose to 14% in 2020.
Mahindra Financial Services Limited (MMFSL), established in 1991, has more
than 1,000 branches across the country and a customer base of more than 3
million. MMFSL is one of the most renowned organizations and has two
affiliates that offer financial services for insurance and rural housing. It also
offers advances in gold, vehicles, company advances, home credits,
advances in working capital and much more. M&M Finance focuses on
providing services to India's rural and semi - urban sectors and has
positioned itself between the organized banking sector and local lenders. Its
rural and semi-urban product basket comprises mainly vehicle finance,
personal loans, home financing and gold loans. Thanks to its wide network of
branches with local employees and the right product range, its sales in the
last five years have quadrupled.
Major market players in the Industry include:
1. Tata Capital
2. HeroFinCorp
3. Fullerton India
4. Axis Bank
5. HDFC
6. Chola
7. Bajaj Auto Finance
8. Magma
9. Rockwell Industries
10. ICICI Bank
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The consumer segments and types targeted include people form rural, semi
urban areas, cities, farmers, industrialists, adults, ageing populations, new
families etc.
Internal Analysis and External Analysis:

Internal Analysis includes analyzing a firm’s strengths and weaknesses while
external analysis includes analyzing its opportunities and threats. Together,
they form the SWOT Analysis.
Strengths: Weaknesses:
Mahindra Finance has advantage of Mahindra Finance provides advisory

brand name of Mahindra &Mahindra service and they do not have share
Group. broking facility which their
Mahindra Finance has large asset competitors have.
base of Rs.5000 crores.
It has large distribution channels Mahindra Finance is not known to
with 350 branches all over the the people.
nation.
Company has large financial base as Mahindra Finance does not make
its IPO was subscribed 26.88 times. advertisement of its product.
Opportunities: Threats:
Mahindra Finance has entered into The biggest threat for Mahindra
mutual fund distribution which is Finance in the market is new entry
growing as per Indian market of foreign non-banking financial
development institutions.
Automobile sector in India is growing In case of vehicle financing company

as foreign companies entering in has tough competition from large
India which is useful for Mahindra banks like State Bank of India, ICICI
Finance as it provides vehicle loans etc.
Mahindra Finance helps individuals in

making financial planning which is
most profitable in as investment
trend is changing in India.
Table 6
Strengths:
Mahindra Finance has distinguished provider of financial services with local
catering services for local customers, an extensive distribution networks,
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particularly in rural areas and small towns, a diverse range of products and
robust collections. They provide simplified and prompt assessment of loan
requests and disbursements. They are capable of meeting the expectations
of a variety of investors and excellent credit ratings. Innovative technologies
for resource mobilization and prudent fund management practices are also a
strong point of the corporation.
✓ Leading NBFC
✓ Strong position in India
✓ Relationships with farmers
✓ Cultural connection
✓ Recognized brand
✓ M&M Group support
Weaknesses:
Regulatory restrictions - continuously evolving Government regulations may
impact operations and there is uncertain economic and political environment.
They do not advertise and hence have a weak brand presence.
✓ Microstructural
✓ High amount of non-performing loans
✓ Hard to force things
✓ Long duration loans
Opportunities:
✓ Demographic changes and under penetration.
✓ Large untapped rural and urban markets.
✓ Growth in Commercial Vehicles, Passenger Vehicles and Tractors
market.
✓ Use of digital solutions for business/ collections.
✓ NBFCs market share growing
✓ Banking form opportunities
✓ Gov. programs
✓ Emerging tech
Threats:
✓ High cost of funds.
✓ Rising NPAs.
✓ Restrictions on deposit taking NBFCs.
✓ Competitive landscape has become tougher
✓ Automobile industry slow-down
✓ Competition from other NBFCs and banks.
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Mahindra Finance has grown tremendously over the last few years, they
have:
a. Used analytics and Artificial Intelligence (AI) to understand the
behavioural pattern of customers in order to offer better and more
tailored products and services.
b. Engaged with customers at a very personal level.
c. Focused business and collection approach delivered positive results
together with improved reach.
d. Internal customer programmes coupled with growing reach helped
build strong relationships with OEMs and dealerships.
e. Customer base crosses 5 million.
f. Consolidated profits surpassing 1000 crores annually.
They also partnered up with competitor automobile producers so as to not
limit the market for financing services to Mahindra buyers only. Their
presence in the rural areas has contributed immensely to this. They have
branches in a total of 353257 villages across the country. Employee
engagement is one factor which contributes highly to the growth of a firm.
Graphs 25 and 26
Mahindra’s Employee engagement has been increasing since the beginning.

Other key factors showing the success of Mahindra Finance have also been
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shown below:
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lOMoARcPSD|7587906
Graphs 25-39
From all these charts and graphs, we notice a growing financial hold of the
company which tends to promise great future prospects. Employee
engagement and number of assets financed have increased considerably.
The breakdown of assets financed pie shows us where most of the revenue
comes from, which is Automobiles. Mahindra and Mahindra, the parent
company of Mahindra finance is primarily an automobile company and it
makes sense that most of the revenue comes from this sector.
Annual Growth:
According to the Central Statistical Office (CSO), during Q4–January –March
2018 the Indian economy posted a
growth rate of 7.7 percent, allowing
the country to maintain its position as
the fastest - growing major economy.
This was due to the robust
performance of the manufacturing
and service sectors and the good
production of the farm. India has
positioned itself as the most dynamic
emerging economy in the largest Graph 20
countries and is expected to remain the fastest growing
economy under the government's gradual implementation of robust private
consumption and notable domestic reforms.
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Conclusion
Our group believes that the marketing effort of the company is weaker as
compared to its competitors. It does not advertise at all, out of all four
promotional strategies, only personal selling is being followed, so they need
to work on advertising, public relations and sales promotions. Otherwise,
they are doing well in the industry. Their revenues are increasing and so are
assets financed (as mentioned in the situational analysis). They are doing
good market research on consumer behavior and psychographics which is
great, because first and foremost, it is really important to know your
consumer. Only after you get to know the behavioral patterns of your
consumers, you can provide what they want from you. Compared to its
competitors, Mahindra Finance can improve upon their differentiation and
positioning strategies because other firms are also at par in the industry,
and some uniqueness is required for attracting more customers. Otherwise,
their customer relationship management is better than most of their
competitors such as Bajaj Finance and Tata Capital. Their employees are
famous for building relations with people, especially in the rural sector. The
only place they are lacking at is in promotions.
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Recommendation
No doubt Mahindra Finance has an advantage of its brand name of Mahindra
and Mahindra group with an asset base of Rs. 5000 crores. Though the
credit rating of the company is very high and is one of the leading NBFC still
it needs to take more steps to have a strong name in the Non-banking
financial sector. The company needs to expand its online marketing and
make its website more understandable clearly indicating the rate of interest,
processing fees and other details. They should come up with innovative
offers specially in the urban sector to compete with banks and establish its
base. They should cater to the needs and of the customers and start
customizing plans because Marketing begins with customer required
identification. Most reviews regarding the company are bad because of the
poor customer service system and high rate of interest. With increase
automobile industry in India and increase in people taking home loans it is
necessary and need of the hour for the company to start coming up with
new and innovative schemes. They should focus on Advertising and
Promotion since they believe that they already have an established name in
the market and thus doesn’t feel like promoting their products which makes
it difficult for the people to understand their schemes. During our research
and after talking to the company executives we found out that they only
focus on intensive psychographic research and consume behavior and draw
their conclusion rather they should also conduct other types of research to
understand consumer mindset and their point of view too. Apart from this
they should definitely take steps to diversify its operation in other parts
rather than only focusing in rural sector if they wish to establish a strong
base in urban sector.
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Learning
During the course of this project, we learnt how difficult it is to go out into
the real world and actually meet people, talk to them, and collect
information. Our Non-Paying sponsor was luckily very co-operative ad
helpful during the whole procedure and provided us with answers to
questions which we were curious about. Another thing we learnt was that
there is no space for mistakes in the real world. You need to do you market
research and be aware of all you learn in class in order to be able to apply it
in real life. But, experience is one thing which we can never gain form sitting
inside a classroom. From this project, we got an experience which we will
value for the rest of our lives. A major limitation that the group faced was
coming to terms with the non-paying sponsor. Mahindra Finance is a huge
corporation and they don’t want their information going out. We made sure
not to include direct answers in our interviews. We also managed to lace the
information we got along with the theory and present it in a way that does
not reveal any ‘secrets’ of the company.
If the same project was given to us the next time, our group would probably
try to arrange more interviews with the managers and higher-level decision
makers in the company so as to get better quality information out of the
answers we get.
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List of Tables and Figures

S. No Item Description Page
Number
1. Image-1 Diversified Product Portfolio 7
2. Image-2 Market Before Segmentation 8
3. Image-3 Market After Segmentation 9
4. Table-1 Projected Growth 12
5. Table-2 Variables for Segmentation 12
6. Charts and Graphs-1 Survey 1, Q1 13
23. Table-3 Dhanvruddhi FD Scheme 27
24. Table-4 Samruddhi FD Scheme 28
30. Table-5 List of Competitors 33
33. Image-4 Positioning 37
34. Charts and Graphs-25 Credit Distribution 39
35. Table-6 SWOT Analysis 41
36. Charts and Graphs-26 Employee Engagement 41
37. Charts and Graphs-27 Assets Financed 42
38. Charts and Graphs-28 Income 42
39. Charts and Graphs-29 Profit After Tax 42
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40. Charts and Graphs-30 Dividend 42

41. Charts and Graphs-31 Reserves Surplus 42
42. Charts and Graphs-32 Lives Impacted 42
43. Charts and Graphs-33 CSR Spending 42
44. Charts and Graphs-34 Basic EPS 43
45. Charts and Graphs-35 Total Assets 43
46. Charts and Graphs-36 RoA 43
47. Charts and Graphs-37 RONW 43
48. Charts and Graphs-38 Contracts 43
49. Charts and Graphs-39 Offices 43
50. Charts and Graphs-40 Breakdown-Assets Financed 44
51. Charts and Graphs-41 Annual Growth 44
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Bus 120 Essentials of Marketing Prof. Shyam Vyas, Ph.D.
PEER EVALUATION FOR GROUP PROJECT REPORT FORMAT

SHOULD BE THE LAST PAGE OF MARKETING PROJECT REPORT
Project/Report Title:
Note:
Submit only one peer evaluation form for your Group Project Report along with it – as its last page.
All Group members are required to sign-off on the peer evaluation with sincerity and in the presence
of each other. Giving marks to group members is a professional and open exercise that must be done
– without fear or favour. Nothing personal about it.
DO NOT GIVE IDENTICAL MARKS to each other! Stay professional.
Member Name Attendance Participation Contribution Degree of Overall

at meetings (Enthusiasm) Cooperation
(30%) (30%) (15%) (25%) (100%)
Group Members’ Signatures / Names in capital letters, and Date

___________________________________ ___________________________________
___________________________________ ___________________________________
We met as a group on this marketing project a total of ……. times. We spent approximately …. total
minutes discussing issues and sharing information’s. We connected (actually met) with …. real world
executives that have all been named and identified in the “acknowledgement”, made …. phone calls,
made … appointments, sent out …. emails during the course of this project.
In our view our effort and accomplishments are of the order of (circle ONE):
A (above 90%) B (80 to 90%) C (70 to 80%) D (60 to 70%) F (less than 60%).
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From the desk of

Prof Shyam Vyas, PhD
Essentials of Marketing Effort, Assistance & Assessment Initiative -
SV/UFV Chandigarh /Bus 120 PROJ Fall 18 27th Aug, 2017
GROUP # ____________ Essentials of Marketing Effort, Assistance & Assessment Initiative -
MAJOR PLAYERS’ CHART
- due in your group project file ASAP
Each group needs to immediately fill this MPC - (only the email column is optional)
Select a minimum of 2 – 3 brands in the group’s chosen product category - and fill
the following details carefully and completely. Name /address, phone# and email
address must be found - and mentioned.
Only then can you as a group or individual begin to target the decision-maker
seriously as a Non-Paying Sponsor.
Consumer Market / Consumer Product Category related ➔
______________________________________________________________
Company
/Brand
Name / Designation Phone/Fax/email
Syl # Name / Address (local) Of highest ranking
Marketing person (locally)
_____________________________________________________________
1.
______________________________________________________________
2.
______________________________________________________________
3.
______________________________________________________________
4
_________________________________________________________________________________
Group Member Names Phone Email
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Appendix
Secondary Data Folio
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Index of Secondary Data

Article 1 .......................................................................................... 68
“Mahindra Financial Services: Maintain ‘Buy’; TP at Rs 525” ................ 68
Summary ........................................................................................ 70
Article 2 .......................................................................................... 71
“Mahindra Finance Q2 PAT up 132% to Rs 3.81 bn, AUM sees 26% y-o-y
growth” ........................................................................................ 71
Summary ........................................................................................ 72
Article 3 .......................................................................................... 73
“Mahindra Finance fixed deposits: Earn up to 8.75% interest; Here’s
how” ............................................................................................ 73
Summary ........................................................................................ 74
Article 4 .......................................................................................... 75
“M&M Financial: Rise in cost of funds not steep enough to be passed on”
................................................................................................... 75
Summary ........................................................................................ 76
Article 5 .......................................................................................... 77
“Mahindra & Mahindra Finance eyes 20% annual growth in
disbursements” ............................................................................. 77
Summary ........................................................................................ 78
Article 6 .......................................................................................... 79
“Mahindra Finance announces Q1FY19 results” .................................. 79
Summary ........................................................................................ 81
Article 7 .......................................................................................... 82
“Mahindra AMC eyes Rs 7,000 Cr AUM in FY2018-19” ........................ 82
Summary ........................................................................................ 83
Article 8 .......................................................................................... 84
“Mahindra & Mahindra puts XL Catlin joint venture on hold” ................ 84
Summary ........................................................................................ 85
Article 9 .......................................................................................... 86
“Worst is over, rural sentiment turns positive: Mahindra Financial sees
fewer bad loans, higher return on assets” ......................................... 86
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Summary ........................................................................................ 88
Article 10 ........................................................................................ 89
“More cash in the hands of villagers sends relief signal for Mahindra
Financial” ..................................................................................... 89
Summary ........................................................................................ 91
Article 11 ........................................................................................ 92
“Mahindra Finance to foray into financing two-wheelers, consumer
durables”...................................................................................... 92
Summary ........................................................................................ 93
Article 12 ........................................................................................ 94
“Mahindra Financial to raise up to Rs15,000 crore this fiscal year from
lenders, sale of bonds” ................................................................... 94
Summary ........................................................................................ 95
Article 13 ........................................................................................ 96
“Our forecast is a 50-60 bps increase in interest rates’, says Ramesh
Iyer, Vice-Chairman and MD of Mahindra Finance” ............................. 96
Summary ........................................................................................ 98
Article 14 ........................................................................................ 99
“Mahindra Finance in talks to raise $300 million via masala bonds” ...... 99
Summary ...................................................................................... 101
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Article 1
“Mahindra Financial Services: Maintain ‘Buy’; TP at Rs 525”
MMFS reported PAT of Rs 3.8b (up 1.5x y-o-y) under Ind-AS. The quarter
was marked by robust disbursement and AUM growth, and an improvement
in margins.
Mahindra Fin Services: Maintain ‘Buy’; TP at Rs 525
MMFS reported PAT of Rs 3.8b (up 1.5x y-o-y) under Ind-AS. The quarter
was marked by robust disbursement and AUM growth, and an improvement
in margins. Continuing the trend of the prior quarter, value of assets
financed grew 44% y-o-y to Rs 109b.
Consequently, reported AUM grew 6% q-o-q (+27% y-o-y) to Rs 595b. Over
the past year, the share of Auto/UV declined from 28% to 25%, the impact
of which was offset by an increase in the share of SME financing (12% to
14%). Calculated NIM on AUM expanded 130bp y-o-y to 8.4%, driven
largely by a higher yield on loans (driven by product mix and general yield
hikes), despite an increase in cost of funds.
Total provisions as a percentage of loans stood at 3.0% v/s 3.1% a quarter
ago and 4.3% a year ago. PCR including standard assets provisions was
largely stable q-o-q at 59%. Management commented that it is presently
borrowing from every possible source. However, it is keeping a close watch
on the evolving liquidity situation.
Given strong collections, management is comfortable about the liquidity
position for the next six months. The business environment for MMFS is
getting better, with multiple tailwinds in each product class. Asset quality
has improved consistently over the past few quarters. Improvement in credit
costs and growth will drive an increase in RoE to ~15%+ in FY20.
MMFS’ long-term prospects remain strong. We raise our EPS estimates by
~20% for FY19/20 on the back of the robust operating and asset quality
performance. Our SoTP-based target price is `525 (Sept-2020 based).
Maintain ‘Buy’.
Continuing the trend of the prior quarter, value of assets financed grew 44%
y-o-y to Rs 108b. Reported AUM grew 6% q-o-q/ 27% y-o-y to `595b.
Growth was driven by tractors, CV and SME segments. Over the past year,
the share of Auto/UV declined from 28% to 25%, which was offset by SME
financing (12% to 14%). Calculated NIM on AUM expanded 130bp y-o-y to
8.4%, driven by higher yield on loans (better asset quality performance)
despite increase in cost of funds. MMFS raised inter-corporate deposits from
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its group Mahindra companies as well as the parent. Opex grew slower than
AUM at 28% y-o-y, resulting in some operating leverage.
Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual
Funds, calculate your tax by Income Tax Calculator, know market’s Top
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on Twitter.
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Summary
Over the past year, Auto / UV 's share decreased from 28% to 25%, the
impact of which was offset by an increase in the share of SME financing
(12% to 14%). Calculated AUM NIM increased 130bp y - o-y to 8.4 percent
due to higher loan yields (better asset quality performance) despite
increased funding costs. In line with the previous quarter's trend, the value
of the assets financed increased by 44 percent to Rs 109b. The quarter was
characterized by a strong disbursement and AUM growth and margin
improvement.
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Article 2
“Mahindra Finance Q2 PAT up 132% to Rs 3.81 bn, AUM sees
26% y-o-y growth”
Mahindra Finance has posted a net profit growth of 132 per cent to Rs 3.81
billion for the quarter ended September 30, 2018, as against Rs 1.64 billion
in net profit during the same period of the previous financial year.
Total income rose by 39 per cent to Rs 21.5 billion for Q2 FY2019, as against
Rs 15.4 billion in the corresponding quarter of FY2018.
The total assets under management (AUM) for Mahindra Finance stood at Rs
594.7 billion at the end of Q2 FY2019, registering a year-on-year growth of
26 per cent, from Rs 472.1 billion at the end of Q2 FY2018.
Gross non-performing assets (GNPAs) have come down from 13.1 per cent
in Q2 FY2018 to 9 per cent at the end of Q2 FY2019. Net NPA has reduced
from 8.7 per cent in Q2 FY2018 to 6 per cent at the end of Q2 FY2019.
Mahindra Rural Housing Finance, a subsidiary of Mahindra Finance, disbursed
Rs 8.24 billion worth of loans in Q2 FY2019, as against Rs 5.82 billion worth
of loans disbursed in Q2 FY2018.
The housing finance arm posted a net profit growth of 39 per cent from Rs
430 million in Q2 FY2018 to Rs 600 million at the end of Q2 FY2019.
Mahindra Insurance Brokers received Rs 752 million in income during Q2
FY2018, while it received Rs 445 million in income during the corresponding
quarter of the previous financial year.
Net profit for the insurance broker grew by 34 per cent, year-on-year, from
Rs 80 million in Q2 FY2018 to Rs 118 million at the end of Q2 FY2019.
Mahindra Asset Management Company incurred a loss of Rs 115.3 million in
Q2 FY2019, as against a loss of Rs 62.3 million during the same period in
the previous year.
AuM for the asset management firm has grown by 193 per cent, year-on-
year, to Rs 43.4 billion at the end of Q2 FY2019.
Mahindra Finances' stock price closed at Rs 399.65 on the NSE, up by 6.76
per cent from its previous closing price.
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Summary
Mahindra Rural Housing Finance, a subsidiary of Mahindra Finance, provided
loans of Rs 8,24 billion in Q2 FY2019 compared to loans of Rs 5,82 billion in
Q2 FY2018. The housing finance arm posted a net profit increase of 39
percent from Rs 430 million in the second quarter of 2018 to Rs 600 million
in the second quarter of 2009. At the end of Q2 FY2019, the total assets
under management (AUM) for Mahindra Finance amounted to Rs 594,7
billion, a year - on - year growth of 26 percent, compared to Rs 472,1 billion
at the end of Q2 FY2018. Mahindra Insurance Brokers received revenue of
Rs 752 million in Q2 FY2018 and revenue of Rs 445 million in the
corresponding quarter of the preceding financial year.
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Article 3
“Mahindra Finance fixed deposits: Earn up to 8.75% interest;
Here’s how”
if you are looking for fixed deposits which offer higher interest rates than
those offered by bank FDs and are also willing to take some risk, then fixed
deposits offered by NBFCs may be a good option.
fixed deposits, FD, fixed deposit interest rates, Mahindra Finance FD, fixed
deposit in Mahindra Finance, it is interesting to note that Mahindra Finance’s
FD schemes are of two types – Dhanvruddhi (online) and Samruddhi
(offline).
If you are looking for fixed deposits which offer higher interest rates than
those offered by bank FDs and are also willing to take some risk, then fixed
deposits offered by NBFCs (non-banking financial companies) may be a good
option. Mahindra Finance, the nation’s leading rural finance company, is also
such an NBFC which offers FDs at higher rates.
According to the company, its fixed deposits have a rating of ‘FAAA’, which
indicates a high level of safety. Additionally, investors get covered with a
free accidental death insurance coverage of Rs 1 lakh for a year.
It may be noted that Mahindra Finance had recently revised interest rates on
its fixed deposits. Interest rate for deposits up to 12 months had been hiked
by 30 basis points to 8.00%, while those for 18 months had been increased
by 35 basis points to 8.10%, and for deposits up to 24 months rates had
been hiked by 10 basis points to 8.35%.
It is interesting to note that Mahindra Finance’s FD schemes are of two types
– Dhanvruddhi (online) and Samruddhi (offline). Investors are eligible for
0.25% higher rates, if they choose the online mode of investment with a
different tenure. It offers 0.10% additional interest rate for Senior Citizens
for Dhanvruddhi Deposits. The company offers 0.25% additional interest
rate for senior citizens for Samruddhi Fixed Deposits, and 0.35% additional
interest rate for all Mahindra group company employees & employees’
relatives.
Depositors should also know that both the Dhanvruddhi (online) and
Samruddhi (offline) schemes are available for cumulative and non-
cumulative options. Cumulative schemes are those where the interest is
calculated quarterly or half-yearly and is paid at the time of maturity, while
in non-cumulative schemes, interest is paid on a monthly, quarterly, half-
yearly or yearly basis as chosen by the depositor.
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Summary
If you are looking for fixed deposits that offer higher interest rates than
bank FDs and are also willing to take some risk, then fixed deposits offered
by NBFCs (non - bank financial firms) may be a good option. The company
offers an additional 0.25 percent interest rate for senior citizens for
Samruddhi Fixed Deposits and an additional 0.35 percent interest rate for all
employees of the Mahindra group. The interest rate for deposits up to 12
months was increased by 30 basis points to 8,00 percent, while for deposits
up to 24 months, the rate was increased by 35 basis points to 8,10 percent
and by 10 basis points to 8,35 percent. It is interesting to note that the FD
schemes of Mahindra Finance include Dhanvruddhi (online) and Samruddhi
(offline).
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Article 4
“M&M Financial: Rise in cost of funds not steep enough to be
passed on”
Ramesh Iyer, VC and MD of M&M Financial said that the average cost of fund
for M&M remains at 8.3-8.4 percent, hence there is no need to pass it to
customers
Ramesh Iyer, Vice Chairman and Managing Director of Mahindra & Mahindra
Financial Services, spoke to CNBC-TV18 about the company's business plans
and cost of fund.
"Rise in cost of funds not steep enough to pass on to the customers," said
Iyer.
"The average cost of fund for us still remains at about 8.3-8.4 percent since
we have well matched fund that we have taken and therefore any new
borrowing comes with a new rate and that comes at about 8.7-8.8 percent
but the average is still at about 8.3-8.4 percent," he added.
Iyer further said that they need to see customer willingness to pay if
demand on asset side is natural.
"As a finance company we are at least very clear that we must have the
margin orientation very high and do only as much business that we believe
can be done through the cost risk that can be passed on to the consumer. As
a finance company I do not think we are here to absorb all of that," Iyer
added.
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Summary
Ramesh Iyer, VC and MD from M&M Financial stated that the average M&M
fund cost remains at 8.3-8.4 percent, so customers\ Ramesh Iyer, Vice
President and CEO of Mahindra & Mahindra Financial Services, spoke to
CNBC-TV18 about the company's business plans and fund costs. " The
average fund cost for us continues to be around 8.3-8.4 percent since we
have a well-equipped fund and therefore any new borrowing comes at a new
rate, which is around 8.7-8.8 percent, but the average is still around 8.3-8.4
percent, " he added.
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Article 5
“Mahindra & Mahindra Finance eyes 20% annual growth in
disbursements”
Mahindra and Mahindra Financial Services is eyeing a 20% annual growth in

disbursements after posting strong numbers for Q1 FY19, Ramesh Iyer, vice
president and chairman, said on Wednesday.
Mahindra and Mahindra Financial Services is eyeing a 20% annual growth in
disbursements after posting strong numbers for Q1 FY19, Ramesh Iyer, Vice
Chairman and Managing Director, said on Wednesday. Net profits rose
33.62% year-on year to Rs 269.05 crore in Q1FY19 on the back of an
increase in sales of 28.56% to Rs 1925.84 crore. The company has seen
revenue growth rates increasing on a sequential basis over the last five
quarters.
Iyer said the company’s business model has been tested a couple of years
back when infrastructure spending was low and the monsoon was sub-par.
Moreover, the Reserve Bank of India (RBI) had directed NBFCs to migrate to
the 90 days past due (dpd) regime for recognition of non-performing assets
(NPAs).
“The current scenario is a lot more positive, the monsoon has been good,
buoyancy is very high and there is also a spurt in infrastructure spending,”
Iyer said. In Q1FY19, the company’s NPAs were Rs 5,534 crore; this
compares with Rs 7,049 crore in Q1FY18 and Rs4,415 crore in Q1FY17. As a
share of the portfolio, gross NPA ratio in Q1FY19 stood at 9.4%, lower than
14.5% in Q1FY18 and 10.7% Q1FY17.
“We are looking for resolutions,” Iyer said. He added that despite the RBI’s
90-day directive, the company improved gross NPAs by at least 4% over the
last year.
The company offers a range of loan products including loans for tractor
purchases and homes.
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Summary
Mahindra and Mahindra, Ramesh Iyer Industries, Vice - President, Mahindra
& Mahindra Financial Services Mahindra and Mahindra Financial Services are
forecasting an annual 20 percent increase in disbursements after a strong
Q1 FY19 figure, said Ramesh Iyer, Vice-President and Managing Director on
Wednesday. Mahindra and Mahindra Financial Services are witnessing an
annual 20 percent increase in disbursements following a strong Q1 FY19
figure, said Ramesh Iyer, vice president and chairman on Wednesday.
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Article 6
“Mahindra Finance announces Q1FY19 results”
Mumbai, July 27, 2018: The Board of Directors of Mahindra & Mahindra
Financial Services Limited (Mahindra Finance), a leading provider of financial
services in the rural and semi-urban markets announced today the
unaudited financial results for the quarter ended June 30, 2018.
The Total Income increased by 29% at Rs.1940 Crores during the quarter
ended June 30, 2018, as against Rs.1509 Crores in the corresponding period
last year. The Profit After Tax (PAT) stood at Rs.269 Crores during the
quarter ended June 30, 2018, as against Rs.201 Crores during the
corresponding quarter last year, registering a growth of 34% over the same
period previous year.
During the quarter ended June 30, 2018, the Company's customer base has
crossed 5.5 Million.
The Total Assets Under Management (AUM) stood at Rs.58711 Crores as on

June 30, 2018, as against Rs.48468 Crores as on June 30, 2017, registering
a growth of 21%.
The Total value of assets financed for the quarter ended June 30, 2018, was
Rs.10338.68 Crores as against Rs.7639.90 Crores during the same period
previous year, registering a growth of 35%.
The Company continues to be leading financer for automotive and tractors,

including pre-owned vehicles. During the quarter, growth has been higher in
the pre-owned and commercial vehicle segment and also have gained
market share in its lead products. Collection efficiency in the first quarter
has been maintained at levels higher than previous year.
Impairment provisioning is done as per Expected Credit Loss (ECL) method

prescribed in Ind AS, as of 30 June 2018 which requires provisioning in three
stages. The company has considered all loan accounts with an ageing of
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above 90 days under Stage 3 (Impaired assets). The Gross Stage 3 levels
have gone down to 9.4% for the quarter ended June 30, 2018, from 14.5%
during the corresponding quarter last year. The Net Stage 3 levels have
gone down to 6.3% for the quarter ended June 30, 2018, from 9.3% during
the corresponding quarter last year. The Stage 3 provisioning coverage ratio
stood at 35.1%. Standard asset (Stage 1 and Stage 2) provisioning has
increased to 258 bps as a result of ECL provisioning under Ind AS versus 40
bps as per RBI norms.
Shares of MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD. was last

trading in BSE at Rs.517.2 as compared to the previous close of Rs. 512.55.
The total number of shares traded during the day was 341839 in over 5229
trades.
The stock hit an intraday high of Rs. 527.45 and intraday low of 504.65. The
net turnover during the day was Rs. 175839268.
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Summary
Mumbai, 27 July 2018: Mahindra & Mahindra Financial Services Limited
(Mahindra Finance), a leading provider of rural and semi-urban financial
services, today announced unaudited financial results for the quarter ended
30 June 2018. The level of the Gross Stage 3 decreased from 14.5 percent in
the corresponding quarter last year to 9.4 percent for the quarter ended 30
June 2018. The Net Stage 3 levels dropped from 9.3 percent in the
corresponding quarter of last year to 6.3 percent for the quarter ended June
30, 2018. The total assets under management (AUM) were at Rs.58711
Crores as at 30 June 2018, compared with Rs.48468 Crores as at 30 June
2017, with an increase of 21%. The company's customer base crossed 5,5
million during the quarter ended 30 June 2018. The profit after tax (PAT)
amounted to Rs.269 Crores in the quarter ended June 30, 2018, compared
with Rs.201 Crores in the corresponding quarter last year, which showed a
34 percent increase over the same period last year. The total value of the
assets financed for the quarter ended 30 June 2018 was Rs.10338.68 Crores
compared with Rs.7639.90 Crores for the same period last year, an increase
of 35%. In the quarter ended June 30, 2018, total revenue increased by 29
percent to Rs.1940 Crores, compared with Rs.1509 Crores in the
corresponding period last year.
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Article 7
“Mahindra AMC eyes Rs 7,000 Cr AUM in FY2018-19”
The Mahindra Credit Risk Yojana scheme is targeted at investors who seek
reasonable income and capital appreciation over medium and long term. The
new fund offer opens on July 27 and closes on August 10, 2018.
Mahindra Asset Management Company has set a target to handle assets
under management of about Rs 7,000 crore and increase its presence to 500
cities during the current financial year, its Managing Director and CEO,
Ashutosh Bishnoi said here today. "We are expecting Rs 6,500-Rs 7,000
crore of AUM (assets under management) by March 2019 from Rs 4,500
crore AUM in June 2018. Out of this, Rs 1,500 crore is in retail equity," he
told reporters, after launching new open-ended debt scheme 'Mahindra
Credit Risk Yojana', here.
On expansion plans, he said, "in two years’ time, we reached 400 cities and
we would like to take that number to 500 by this financial year-end". "In five
years, we want to be selling in 1,500 cities and may be in a few villages
also. The objective of Mahindra Mutual Fund is to go to smaller towns", he
said.
The Mahindra Credit Risk Yojana scheme is targeted at investors who seek
reasonable income and capital appreciation over medium and long term. The
new fund offer opens on July 27 and closes on August 10, 2018.
It would reopen from continuous sale and repurchase within five business
days from the date of allotment, he said.
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Summary
The Mahindra Credit Risk Yojana scheme is aimed at investors seeking
reasonable income and capital appreciation over the medium and long term.
Out of this, Rs 1,500 crore is in retail equity, " he told reporters, after
launching a new open - ended debt scheme ' Mahindra Credit Risk Yojana.'
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Article 8
“Mahindra & Mahindra puts XL Catlin joint venture on hold”
Mahindra & Mahindra Financial has put on hold it planned joint venture with
XL Catlin, following the major insurer’s acquisition by AXA.
AXA already has an existing joint venture in India with Bharti Enterprises.
In February, Mahindra and XL Catlin agreed to form a joint venture, giving

the latter access to India’s burgeoning insurance market. But in March, it
was revealed that AXA would acquire 100% of XL Catlin, which provides
property, casualty and specialty re/insurance to commercial clients. The deal
is worth US$15.3 billion
India’s insurance regulations forbid entities from owning multiple licenses in

the life and general insurance segments.
“With XL Catlin having been taken over by AXA, we will have to revisit the
plan as AXA has presence in both life and general insurance business,” a
source familiar with the issue told The Economic Times. “We are waiting
further details from XL on the matter.”
Mahindra was supposed to own 51% of the proposed joint venture, with XL
Catlin owning the rest. In October 2017, XL Group bought a 20% stake in
Mahindra Insurance Brokers for INR2.6 billion (US$37.75 million).
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Summary
XL Group purchased a 20 percent stake in Mahindra Insurance Brokers in
October 2017 for INR2.6 billion (USD 37.75 million). In February, Mahindra
and XL Catlin agreed to form a joint venture that would give them access to
the growing insurance market in India. " With XL Catlin being taken over by
AXA, we will have to revisit the plan because AXA has a presence both in life
and in general insurance, " said the Economic Times, a source familiar with
the issue. " We are waiting for further details on the matter from XL. "
Mahindra was supposed to own 51 percent of the proposed joint venture,
with the rest owned by XL Catlin. But in March it was revealed that AXA
would acquire 100 percent of XL Catlin, which provides commercial
customers with property, casualty and specialty re /insurance. The deal
amounts to US$ 15.3 billion of India's insurance rules that prohibit entities
from holding multiple life and general insurance licenses. After the major
insurer acquisition by AXA, Mahindra & Mahindra Financial has suspended its
planned joint venture with XL Catlin.
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Article 9
“Worst is over, rural sentiment turns positive: Mahindra Financial
sees fewer bad loans, higher return on assets”
More cash in the hands of rural Indians along with their willingness to spend
spells good news for Mahindra & Mahindra Financial Services Ltd., a non-
bank lender for purchasers of tractors and vehicles, by helping it rebound
from shrinking profits and increasing bad loans. bad loans, Mahindra
Financial, rural Indians, Mahindra & Mahindra Financial Services, non-bank
lender, tractors, vehicles, Mahindra Financial shares. Government policy,
including buying farm products at higher-than-market prices along with a
bigger budget aimed at boosting the rural economy, is already benefiting
Mahindra Financial. More cash in the hands of rural Indians along with their
willingness to spend spells good news for Mahindra & Mahindra Financial
Services Ltd., a non-bank lender for purchasers of tractors and vehicles, by
helping it rebound from shrinking profits and increasing bad loans. “After
two years of struggle, we’re seeing that rural sentiment has definitely turned
positive and farm cash-flow has held up,” Ramesh Iyer, vice chairman and
managing director, said in an interview in Mumbai. “On-time, widespread
and more-than-average rainfall predicted this year will lead to rural
consumers pulling out money and spending it,” he said. Government policy,
including buying farm products at higher-than-market prices along with a
bigger budget aimed at boosting the rural economy, is already benefiting
Mahindra Financial. The lender, which has a presence in about 330,00
villages, forecasts bad loans will continue to shrink as clients’ financial health
strengthens. Signaling an improvement, the firm’s net income doubled for
the 12 months through March after falling for three straight years.
Gross bad loans were reduced to 8.5 percent of the total as of March 31
from 9 percent a year earlier. The firm forecasts they’ll dip to 7 percent in
the first half of this financial year and may fall to 5 percent later. “With signs
of good rainfall and higher crop prices, things are going the right way for us
and that will help reduce bad loans,” Iyer said.
Even as Mahindra Financial shares seem to have factored in the revival —

they have more than doubled since April 2016 — many analysts tracking the
company see further gains, with a consensus price target 13 percent higher
than the last closing price. Twenty-four of the 31 analyst estimates compiled
by Bloomberg are higher than the current share value.
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With growth improving, current valuations at 2.1 times the estimated book
price for the fiscal year through March 2020 “look undemanding,” Nomura
Financial Advisory & Securities (India) Pvt said in an investor note June 6.
Nomura recommends buying the shares with a price target of 600 rupees.
The stock closed yesterday at 491 rupees.
Not all analysts are as ebullient about the firm’s outlook, seeing risk in its
reliance on the health of farmers’ incomes. “We prefer non-bank financiers
that are less dependent on rural consumers as it shields them from the
vagaries of the village economy,” said Digant Haria, an analyst at Antique
Stock Broking Ltd. in Mumbai, who rates the shares as hold with a target of
554 rupees.
As bad debt shrinks, Mahindra Financial aims to achieve a 3 percent return

on assets within about 18 months, up from 1.9 percent as of March 31; it
expects the value of financed assets to jump at least 15 percent this year.
About 45 percent of the assets are manufactured by its parent Mahindra &
Mahindra Ltd., the nation’s biggest tractor maker. The firm’s net interest
income jumped 25 percent last year while provisions and write-offs for bad
loans fell 6 percent from a year earlier.
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Summary
More cash in rural Indians ' hands, along with their willingness to spend
good news for Mahindra & Mahindra Financial Services Ltd., a non - bank
lender for tractor and vehicle purchasers, helps to reduce profits and
increase bad loans. Mahindra Financial is already benefiting from bad loans,
Mahindra Financial, rural Indians, Mahindra & Mahindra Financial Services,
non - bank lenders, tractors, vehicles, Mahindra Financial shares
Government policy, including the purchase of higher-than-market
agricultural products and a larger budget to boost the rural economy.
Although Mahindra financial shares have been more than doubled since April
2016, many analysts tracking the company see further gains, with a
consensus price target 13 percent higher than the last closing price.
Government policy, including the purchase of agricultural products at higher
prices than the market and a larger budget to boost the rural economy,
already benefits Mahindra Financial. As debt shrinks, Mahindra Financial
aims to achieve a return on assets of 3 percent within 18 months, up from
1.9 percent as of March 31; the value of financed assets is expected to
increase by at least 15 percent this year.
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Article 10
“More cash in the hands of villagers sends relief signal for
Mahindra Financial”
More cash in the hands of rural Indians along with their willingness to spend
spells good news for Mahindra & Mahindra Financial Services Ltd., a non-
bank lender for purchasers of tractors and vehicles, by helping it rebound
from shrinking profits and increasing bad loans.
“After two years of struggle, we’re seeing that rural sentiment has definitely
turned positive and farm cash-flow has held up,” Ramesh Iyer, vice
chairman and managing director, said in an interview in Mumbai. “On-time,
widespread and more-than-average rainfall predicted this year will lead to
rural consumers pulling out money and spending it,” he said.
Government policy, including buying farm products at higher-than-market
prices along with a bigger budget aimed at boosting the rural economy, is
already benefiting Mahindra Financial. The lender, which has a presence in
about 330,00 villages, forecasts bad loans will continue to shrink as clients’
financial health strengthens. Signaling an improvement, the firm’s net
income doubled for the 12 months through March after falling for three
straight years.
Gross bad loans were reduced to 8.5% of the total as of March 31 from 9%
a year earlier. The firm forecasts they’ll dip to 7% in the first half of this
financial year and may fall to 5% later. “With signs of good rainfall and
higher crop prices, things are going the right way for us and that will help
reduce bad loans,” Iyer said.
Even as Mahindra Financial shares seem to have factored in the revival --
they have more than doubled since April 2016 -- many analysts tracking the
company see further gains, with a consensus price target 13% higher than
the last closing price. Twenty-four of the 31 analyst estimates compiled by
Bloomberg are higher than the current share value.
With growth improving, current valuations at 2.1 times the estimated book
price for the fiscal year through March 2020 “look undemanding,” Nomura
Financial Advisory & Securities (India) Pvt said in an investor note June 6.
Nomura recommends buying the shares with a price target of 600 rupees.
The stock closed on Tuesday at Rs 491.
Not all analysts are as ebullient about the firm’s outlook, seeing risk in its
reliance on the health of farmers’ incomes. “We prefer non-bank financiers
that are less dependent on rural consumers as it shields them from the
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lOMoARcPSD|7587906
vagaries of the village economy,” said Digant Haria, an analyst at Antique

Stock Broking Ltd. in Mumbai, who rates the shares as hold with a target of
Rs 554.
As bad debt shrinks, Mahindra Financial aims to achieve a 3% return on
assets within about 18 months, up from 1.9% as of March 31; it expects the
value of financed assets to jump at least 15% this year. About 45% of the
assets are manufactured by its parent Mahindra & Mahindra Ltd., the
nation’s biggest tractor maker. The firm’s net interest income jumped 25%
last year while provisions and write-offs for bad loans fell 6% from a year
earlier.
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lOMoARcPSD|7587906
Summary
More cash in rural Indians ' hands, along with their willingness to spend
good news for Mahindra & Mahindra Financial Services Ltd., a non - bank
lender for tractor and vehicle purchasers, helps to reduce profits and
increase bad loans. Although Mahindra financial shares have more than
doubled since April 2016, many analysts tracking the company see further
gains, with a consensus price target 13 percent higher than the last closing
price. As growth improves, current valuations " look undemanding " at 2.1
times the estimated book price for the fiscal year through March 2020,
Nomura Financial Advisory & Securities (India) Pvt said in an investor note
on 6 June. As debt shrinks, Mahindra Financial aims to achieve a return on
assets of 3 percent within 18 months, up from 1.9 percent as of March 31;
the value of financed assets is expected to increase by at least 15 percent
this year. Government policy, including the purchase of agricultural products
at higher prices than the market and a larger budget to boost the rural
economy, already benefits Mahindra Financial. " After two years of struggle,
we see that rural sentiment has definitely turned positive and that farm cash
flow has stopped, " said Ramesh Iyer, vice president and managing director,
in a Mumbai interview.
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Article 11
“Mahindra Finance to foray into financing two-wheelers, consumer
durables”
Mahindra & Mahindra Financial Services, or Mahindra Finance, is ready to
venture into two-wheeler financing as it looks to cash in on the growing
demand for two-wheelers in India, with leading manufacturers managing to
sell over 2 crore units in a single financial year.
The non-bank lender will be looking to get its share in the fast growing but a
crowded two-wheeler financing market, a decade after its parent Mahindra &
Mahindra entered the highly competitive industry through the acquisition of
select assets of Kinetic Engineering.
This is part of Mahindra Finance's expansion strategy in FY19. It is also
looking to get into consumer durable financing in a couple of months,
managing director Ramesh Iyer told ET.
Iyer expects rural market to drive India's economic growth in the next
couple of years. "We are adding two product lines this fiscal as we plan to
improve our penetration in the rural and semi urban markets," Iyer
explained.
He said the company has run pilots for six months for both two-wheeler and
consumer durable financing and have seen good results. The lender may
initially provide loans for purchasing two wheelers manufactured by
Mahindra & Mahindra but it would eventually finance all leading brands.
Mahindra & Mahindra holds 51.19% in Mahindra Finance.
India is the world's largest two-wheeler market, which is expected to see
double-digit growth this fiscal with the economy hitting the recovery path.
The last time the two-wheeler industry saw double digit expansion was in
FY12 when its registered sales of 13,435,769 units, 12.25% more than the
preceding year.
Mahindra Finance, India's largest tractor financier, has a loan book of Rs
51,000 crore at the end of March, and has a customer base of over 53 lakhs.
It is primarily in the business of financing new and pre-owned auto and
utility vehicles, tractors, cars, commercial vehicles, construction equipment,
and SME financing.
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Summary
Mahindra & Mahindra Financial Services, or Mahindra Finance, is ready to
invest in two - wheel financing in India, with leading manufacturers selling
more than 2 crore units in one financial year. A decade after its parent
Mahindra & Mahindra entered the highly competitive industry by acquiring
selected assets of Kinetic Engineering, the non - bank lender will seek its
share in the fast - growing but crowded two - wheel finance market.
Mahindra Finance, the largest tractor financial institution in India, has a Rs
51,000 crore loan book at the end of March and a customer base of more
than 53 lakh.
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Article 12
“Mahindra Financial to raise up to Rs15,000 crore this fiscal year
from lenders, sale of bonds”
Mahindra and Mahindra Financial Services Ltd is looking to raise Rs10,000-
15,000 crore this fiscal year through various routes including a bond sale, its
vice-chairman and managing director Ramesh G. Iyer said on Monday.
The company needs to inject fresh capital to shore up lending to Rs35,000-
37,000 crore this year, the same as in the previous year, he added.
Mahindra Financial expects around Rs24,000 crore to come in from
repayment of loans. The balance will be raised from banks, sale of bonds
and financial institutions, according to Iyer.
The company’s shareholders have already cleared an enabling resolution to
raise up to Rs40,000 crore. Mahindra Financial has plans to raise up to $300
million from so-called masala bonds, or rupee-denominated offshore debt
instruments, Iyer said.
“In the next couple of weeks, we will know how we are proceeding on that,”
Iyer said, referring to the masala bonds. The company is ready, and it will
decide on the overseas bond sale based on interest rate, he added.
Mahindra Financial, which is owned 51.19% by Mahindra and Mahindra Ltd,
is a rural-focused non-banking financial company that lends for buying
tractors, commercial vehicles and pre-owned vehicles.
The company’s subsidiary Mahindra Rural Housing Finance Ltd makes small
loans for home improvement.
This unit, which has a loan of portfolio of around Rs6,700 crore, typically
makes loans of Rs1-1.25 lakh repayable over 3-5 years.
It also makes loans for purchase of rural homes but the segment currently
accounts for 2-3% of the housing loan portfolio. Going forward, the
subsidiary will focus on making bigger loans of Rs6-8 lakh for purchase of
affordable homes in rural areas.
This segment by 2020 is expected to account for 15-20% of the housing
finance subsidiary’s loan portfolio, according to Iyer.
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Summary
Mahindra and Mahindra Financial Services Ltd aims to raise Rs10,000-
15,000 crore this fiscal year through a variety of routes, including bond
sales, its vice - president and CEO Ramesh G. Mahindra Financial plans to
raise up to $ 300 million from so-called masala bonds or rupee debt
instruments, said Iyer. Mahindra Rural Housing Finance Ltd, a subsidiary of
the company, provides small loans to improve the home. It also provides
loans to buy rural homes, but the segment currently accounts for 2 - 3
percent of the portfolio of housing loans. Mahindra Financial expects a
repayment of loans of approximately Rs24,000 crore. Mahindra Financial,
owned by Mahindra and Mahindra Ltd. at 51,19 percent, is a rural non-
banking financial company that lends to the purchase of tractors,
commercial vehicles and pre - owned cars. According to Iyer, this segment is
expected to account for 15-20 percent of the loan portfolio of the housing
finance subsidiary by 2020. This unit with a portfolio loan of approximately
Rs6,700 crore typically makes Rs1-1,25 lakh loans repayable over 3 - 5
years. The subsidiary will concentrate on increasing Rs6-8 lakh loans for the
purchase of affordable houses in rural areas. According to Iyer, the balance
will be raised from banks, the sale of bonds and financial institutions. The
company must inject fresh capital in order to increase its loans to Rs35,000-
37,000 crore this year, as it did last year.
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Article 13
“Our forecast is a 50-60 bps increase in interest rates’, says
Ramesh Iyer, Vice-Chairman and MD of Mahindra Finance”
he provisions have substantially reduced and that has added to profit.
There's no doubt about it. The second is also that we have been able to
maintain and retain our net interest margin, said Ramesh Iyer, Mahindra
Finance Vice-Chairman and MD. Apart from improved asset quality, an
increase in vehicle sales and better margins have contributed to the 81%
year-on-year (y-o-y) jump in Mahindra Finance’s March quarter profit,
Ramesh Iyer, vice-chairman and managing director, told Shritama Bose.
Excerpts:
Your income has grown 13%, but profit is up 81%. Is this because of a
reversal of provisions?
Definitely, the provisions have substantially reduced and that has added to
profit. There’s no doubt about it. The second is also that we have been able
to maintain and retain our net interest margin. We ask ourselves, when an
increase to the incremental borrowing cost happens, are we in a position to
pass that on to the consumer, like we do when the borrowing cost falls? So
there has been the protection of margins. Another factor is the product-mix
change. When growth comes from tractors, a little more from pre-owned
vehicles, etc., it will come at a yield definitely higher than that from other
products. That also helps maintain growth. But, one large factor that would
have helped growth, in addition to the product mix and disbursements,
would be reversal of past provisions and lower provisions on an ongoing
basis.
What was the fall in provisions y-o-y?
If you look at December-end itself, we had a gross non-performing asset
(NPA) ratio of 11.6%, and that has come down to 8.5% now. Your loan
growth has been 18%. Can this be attributed to the base effect of
demonetization wouldn’t want to put it that way. Let’s say the base was
much lower, but if the OEMs (original equipment manufacturers) didn’t sell,
we would do nothing. So, I think the growth of a finance company comes
from how the underlying asset growth has happened for the OEMs. All the
OEMs, whether it’s Mahindra, Maruti or Tata, everyone has registered growth
in the rural market and my personal opinion is rural market is growing faster
than the urban market, as far as the growth rate is concerned. With our
deeper penetration and working with around 500-odd dealers for all products
across the country, we become a direct beneficiary of that growth. Secondly,
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our pre-owned vehicles segment, where we are participating in our existing

customer trying to sell a vehicle to another customer who wants to buy a
second-hand vehicle, we become a direct financier to them, knowing both
sides. The third is our SME segment, where we have participated in financing
the expansion programs of dealerships or the supplier capacity expansion
programs, has also registered growth for us. So, I think it’s an overall
growth from all products, deeper penetration across the country,
maintaining market share for high-volume products and gaining market
share in the new products that we have entered into.
In which products would you have gained market share?
Even in auto and tractors, from a 32% level we have moved to a 34% level,
and that’s on a very large base. As far as Hyundai, Tata Motors, Nissan and
Renault are concerned, all of these products have shown volume growth and
market-share growth for us.
What has been the net impact of rising yields in the market?
Fortunately for us, at the beginning of the year, we did see a drop-in rate
and then as we moved along, we saw the borrowing cost going up. We don’t
resort to any one source of money since we have a multi-product mix. Even
if the rate of some product has gone up by, say, 50 basis points (bps) or 20
bps, the overall impact on the borrowing cost may have been 20-30 bps.
But, when we replace our old liabilities, which are maturing, some of them
are maturing at even higher rates. Even though we have seen the marginal
cost increase, the average cost does not go up so much because they (new
liabilities) are replacing high-cost borrowing on the book.
What would your outlook for interest rates be for FY19?
I think that if we were to take a one-year horizon, one would see a 50-60
bps increase in rates. That is our forecast.
Will you be in a position to pass it on to your borrowers?
Our practice has been that if there is a 50-bps drop, we have factored that in
our lending rates, therefore, we would pass it on even when there is a 10-
20-bps increase. If we do see that 50-bps increase kicking into the
borrowing, then the lending rate also moves proportionately. It may not be
across products or in all geographies. It is important to understand that the
customer then also passes it on to their consumer in the form of freight
rates or passenger fares.
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Summary
All the OEMs, whether Mahindra, Maruti or Tata, have seen growth in the
rural market, and my personal opinion is that the rural market is growing
faster than the urban market, with regard to the growth rate. What was the
net impact of rising market yields? Fortunately, we saw a drop in rates at
the beginning of the year and then, as we moved on, we saw the borrowing
costs increase. When increases in borrowing costs occur, are we in a position
to pass this on to the consumer, as we do when the borrowing costs fall? So,
margin protection has been established. In addition to improved asset
quality, increased vehicle sales and improved margins contributed to the 81
percent (y-o-y) jump in Mahindra Finance's March quarter profit, said
Ramesh Iyer Apart from improved asset quality, increased vehicle sales and
improved margins contributed to the 81 percent annual jump in Mahindra
Finance's March quarter profit, said Ramesh Iyer. So, I think it is a total
growth of all products, deeper penetration throughout the country, market
share for high - volume products and market share in the new products we
have entered.
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Article 14
“Mahindra Finance in talks to raise $300 million via masala
bonds”
Mahindra and Mahindra Financial Services Ltd (Mahindra Finance) is in talks
to raise as much as $300 million via masala bonds, according to two people
directly aware of the company’s discussions with potential lenders.
Masala bonds are rupee-denominated offshore bonds sold to foreign
investors and settled in dollars, unlike debt raised in foreign currency which
are vulnerable to exchange rate fluctuations.
According to the persons cited above, who spoke on condition of anonymity
the bonds will be placed in two tranches and will mature in five years and
seven years, respectively.
Mahindra Finance, a rural focused non-banking financial company (NBFC),
provides auto loans mainly for buying tractors, utility vehicles and cars.
India’s largest tractor and utility vehicle manufacturer, Mahindra and
Mahindra Ltd, holds 51.2% stake in Mahindra Finance.
A spokesperson for Mahindra Finance declined to comment on its fundraising
plans.
The plan to raise debt through the masala bonds route follows the
company’s equity fundraise last year.
In December, Mahindra Finance raised Rs1,056 crore through qualified
institutional placements (QIP).
QIP is a capital-raising tool through which listed companies can sell equity
shares, fully and partly convertible debentures, or any securities other than
warrants that are convertible into stocks, to a qualified institutional buyer.
Reasons for the masala bond sale were not immediately known. In an
interview in December 2017, Ramesh Iyer, vice-chairman and managing
director of Mahindra Finance, had said the company was open to evaluating
acquisition opportunities.
The plan to raise debt comes after a strong turnaround in its financial
performance.
For the third quarter this financial year, Mahindra Finance posted a
consolidated net profit of Rs365 crore as against a net profit of Rs12 crore
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during the corresponding period last year. The sharp growth in profit was led
by improvement in rural cash flows and a consequent drop in loan provisions
and write-offs. Consolidated total income rose 26% to Rs2,195 crore from Rs
1,748 crore.
Provisions and write-offs fell to Rs223 crore during the quarter from Rs442
crore a year ago. In the past one year, several lenders have raised funds
through both equity and debt routes to expand their loan books.
In October, PNB Housing Finance Ltd, a housing finance company sponsored
by state-owned lender Punjab National Bank and backed by private equity
investor Carlyle Group, raised close to $1 billion by selling masala bonds. In
September 2016, India bulls Housing Finance Ltd raised Rs1,330 crore by
issuing its first masala bonds to overseas investors, to fund its housing
finance business, particularly loans in the affordable home segment.
Earlier in March 2017, Housing Development Finance Corp. Ltd raised about
$504 million (about Rs3,300 crore) through masala bonds to fund business
expansion.
Other lenders that have raised funds through the masala bond route in the
recent times include Shriram Transport Finance Ltd and Cholmondeley
Investment and Finance Co. Ltd.
On Wednesday, shares of Mahindra Finance fell 1.62% to close at Rs438.6
on the BSE, while the benchmark Sensex lost 0.88% to close at 34,757.16.
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Summary
According to two people directly aware of the company’s discussions with
potential lenders, Mahindra and Mahindra Financial Services Ltd (Mahindra
Finance) are in talks to raise up to $ 300 million through Masala Bonds. In
September 2016, India bulls Housing Finance Ltd raised Rs1,330 crore by
issuing its first masala bonds to foreign investors to finance its home finance
business, especially loans in the affordable home sector. In October, PNB
Housing Finance Ltd, a state - owned lender of the Punjab National Bank and
supported by private equity investor Carlyle Group, raised nearly $ 1 billion
by selling masala bonds. Mahindra Finance posted a consolidated net profit
of Rs365 crore for the third quarter of this financial year compared to the
net profit of Rs12 crore for the corresponding period last year. Mahindra
Finance increased Rs1.056 crore in December through qualified institutional
investments (QIP). Shriram Transport Finance Ltd. and Cholamandalam
Investment and Finance Co. have recently raised funds through the Masala
Bond route. Mahindra Finance, a rural non-banking financial firm (NBFC),
provides auto loans primarily for the purchase of tractors, utility vehicles and
automobiles. The plan to raise debt through the route of Masala bonds
follows last year's fundraising of equity funds. Masala bonds are offshore
rupee bonds sold to foreign investors and settled in dollars, unlike foreign -
currency debt that is vulnerable to exchange - rate fluctuations. Ramesh
Iyer, vice president and managing director of Mahindra Finance, said in an
interview in December 2017 that the company was open to assess
acquisition opportunities. The Ltd raised approximately $ 504 million
(approximately Rs3,300 crore) through Masala bonds to finance business
growth. India's largest manufacturer of tractors and utility vehicles,
Mahindra and Mahindra Ltd., has a 51.2% stake in Mahindra Finance.
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Annexure
Primary Data Folio
Completed Questionnaires
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Survey for Loan

Trends
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Survey for Target

Market
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Survey for Brand

Presence
105

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BUS120 Final Group Project

Essentials of Marketing (University of the Fraser Valley)

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BUS120: Essentials of Marketing

Marketing Term Project

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From the desk of

Name & Address of Organisation ______________________________________________________

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Target Market and Segmentation:

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Market Segmentation can be done on

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The type of people Mahindra Finance targets is:

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Other Variables that can be used for segmentation:

Consumer specific Situation specific

Benefits of Market Segmentation

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Drawbacks of not Segmenting your Target Market

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Customer Behavior Analysis

As far as Mahindra and Mahindra Finance is concerned it is considered to be

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We conducted a survey for to understand if people were more interested

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A direct question was asked to our

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34.3 % of the respondent preferred to take an automobile loan,25,7 %

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We segregated difference factors which customer consider while taking loan

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How have customers changed over the years?

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The Firm’s 4Ps

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As Mahindra Finance deals in services related to finance most of the prices of

15 8.30% 8.43% 8.30% 7.75%

*Compounded annually †Additional amount for fresh

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12 8.00% 8.00% 7.85% 7.80%

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According to our survey 86.4% people knew about Mahindra Finance

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According to a survey conducted by our

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1.) ICICI Bank