Shares of Mahindra Finance rose 3% to Rs 240.60 in intraday trade on the BSE on Thursday after the Reserve Bank of India (RBI) lifted restrictions on companies conducting any recovery or recovery activities through outsourcing arrangements.
The stock was up 2% at Rs 238.05 at 9:52 am, while the S&P BSE Sensex fell 0.11%. The stock touched a 52-week high of Rs 247.05 on January 3, 2023.
On September 22, 2022, the Reserve Bank of India directed companies to immediately cease any recovery or repossession activities through outsourcing arrangements until further orders are received.
Back in September, the RBI imposed restrictions on the company after the death of a 27-year-old pregnant woman who was allegedly crushed to death by recyclers under the wheels of a tractor in Jharkhand’s Hazaribagh district.
“The Reserve Bank of India has today directed Mahindra & Mahindra Financial Services Ltd. (MMFSL), Mumbai, to cease immediately any recovery or repossession activities through outsourcing arrangements,” the company said in a September 2022 statement.
As a result of the woman’s death, the police arrested Roshan, a Team Lease employee employed by Mahindra Finance.
Tightening the onboarding process for third-party agents and strengthening the accountability framework under the board-approved action plan, RBI, see its letter dated 4 January, Mahindra Finance said in an exchange filing that it notified the company in 2023 of its decision to lift the above restrictions imposed on the company with immediate effect.
Meanwhile, Mahindra Finance shares have surged 20% over the past three months, outperforming the broader market, while the S&P BSE Sensex rose 4.4%. The stock has risen 30% over the past six months, compared with a 14% gain for the benchmark index.
Mahindra Finance reported solid spending figures for December 2022, up 67% YoY to Rs 4,650 crore, backed by a positive macro environment. Expenses in the December quarter (Q3) were around Rs 14,450 crore, up 80% year-on-year. The year-to-date disbursement was around Rs 35,750 crore, up 95% year-on-year.
Stage-3 and Stage-2 assets saw sequential and sequential improvements. As of the end of December, Phase 3 assets are expected to be about 6.2% and Phase 2 assets about 8.5%, the company said in an exchange filing.
