Mahindra & Mahindra Financial Services Limited has announced its plans to expand into life, health and general insurance sectors as part of its strategy to expand its income streams beyond its core vehicle loan business.
According to an exchange filing on Thursday, the company’s board has given the green signal to enter into complementary business activities, acting as a “corporate agent” (composite) in life, health and general insurance – both group and individual .
The non-banking financial company will seek approval from its shareholders through a special resolution.
However, the company’s entry into the insurance segments is contingent on obtaining necessary approvals from the Insurance Regulatory and Development Authority of India and obtaining no-objection from the Reserve Bank of India and other regulatory authorities.
Mahindra Finance plans to invest Rs 5-10 crore in insurance businesses
Mahindra Financeplans to make an initial investment of Rs 5 to 10 crore in new insurance businesses, which will mainly involve setting up technology infrastructure, manpower Funds will be allocated for recruitment and training and certification expenses.
It estimates that net fee income from these new segments could be around 0.1% to 0.2% of its standalone average assets over the next 1-3 years.
Mahindra FinanceThe company (Mahindra Finance), a leading vehicle and tractor financier in India, currently offers small business loans and housing finance services as well as personal and commercial lines insurance. Does it.
Its subsidiary Mahindra Insurance Brokers Ltd, engaged in non-life and reinsurance brokerage, generated income of Rs 289 crore in the second quarter, contributing 7% to the total consolidated income of the parent company and sold over 5.8 lakh policies. Lists.
Following the announcement, shares of Mahindra & Mahindra Financial Services closed 6.57% higher at Rs 289.40 on Thursday, outperforming the benchmark BSE Sensex, which had gained 1.34%.
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