Mahaveer Finance Bonds Explained: Structure, YTM, Credit Rating & Key Risks

Introduction

Corporate bonds issued by non-banking financial companies (NBFCs) form an important segment of India’s fixed-income market. These instruments allow NBFCs to raise medium-to-long-term capital while offering investors defined interest payments and maturity timelines, subject to credit and market risks.

Searches such as mahaveer finance bonds or mahaveer finance bonds review typically indicate an effort to understand how a specific bond issue is structured, how yield metrics like yield to maturity (YTM) are derived, and what risks apply.

This article provides a purely educational explanation of Mahaveer Finance bonds, covering their structure, credit rating, collateral framework, and key considerations, without ranking, recommending, or assessing suitability.

Overview of Mahaveer Finance Bonds

Mahaveer Finance bonds refer to non-convertible debentures (NCDs) issued by Mahaveer Finance India Limited through private placement. These bonds are:

• Listed on recognised stock exchanges

• Senior secured in nature

• Issued with a fixed coupon structure

• Identified by a specific ISIN

Each bond series is governed by the terms outlined in the offer document and the debenture trust deed, which together define the rights and obligations of bondholders.

Key Bond Features at a Glance Drag

The key disclosed features of the Mahaveer Dec’28 bond series include:

Issuer: Mahaveer Finance India Limited

Bond Name: Mahaveer Dec’28

ISIN: INE911L07147

Nature: Listed

Seniority: Senior

Bond Type: Senior Secured

Mode of Issue: Private Placement (EBP)

Date of Issue: 30 September 2025

Date of Maturity: 30 December 2028

Tenure: Approximately 2 years 11 months

Face Value: ₹1,00,000 per bond

Coupon Rate: 11.50 percent (fixed)

Interest Payout Frequency: Quarterly

Yield to Maturity (YTM): 11.60 percent

Credit Rating: CARE BBB+ (Stable)

Debenture Trustee: Mitcon Trusteeship Services Limited

Collateral Coverage: 1.10x

Minimum Investment Amount: ₹93,623

These parameters define the contractual framework of the bond.

Bond Instrument Structure

Mahaveer Finance bonds are structured as senior secured non-convertible debentures, which means:

They represent a debt obligation of the issuer

Bondholders have priority over unsecured creditors

The bonds are backed by identified collateral

Coupon rate and maturity date are fixed at issuance

The structure is designed to provide clarity on cash flows and repayment priority, subject to the issuer’s ongoing ability to meet its obligations.

Yield to Maturity (YTM) and Coupon Rate

Coupon Rate

The coupon rate of Mahaveer Finance bonds is 11.50 percent, paid on the face value of the bond. Interest is paid quarterly, resulting in scheduled cash flows during the bond’s tenure.

Yield to Maturity (YTM)

The yield to maturity (YTM) of 11.60 percent represents the annualised return implied if the bond is held until maturity, assuming:

All coupon payments are received as scheduled

The bond is purchased at the prevailing market price

Principal is repaid in full at maturity

YTM differs from the coupon rate because it factors in the purchase price, time to maturity, and timing of cash flows. It is a calculated metric and not a guaranteed outcome.

Bond Price, Face Value and ISIN

Face Value

The face value of the bond is ₹1,00,000, which represents:

The principal amount

The base on which interest is calculated

The amount scheduled for repayment at maturity

Bond Price

Clean Price: ₹92.94

Dirty Price: ₹93.62

The difference between clean and dirty price reflects accrued interest between coupon dates.

ISIN

The bond is identified by ISIN INE911L07147, which enables:

Tracking of exchange disclosures

Trading and settlement through depositories

Monitoring of rating actions and corporate announcements

Credit Rating Overview and Interpretation

Mahaveer Finance bonds carry a credit rating of BBB+ (Stable) assigned by CARE Ratings.

What the Rating Indicates

BBB+: Moderate degree of safety regarding timely servicing of financial obligations

Stable Outlook: No immediate expectation of rating change based on current information

Credit ratings are:

Opinions, not guarantees

Based on information available at the time of assessment

Subject to change due to financial or operating developments

Issuer Background: Mahaveer Finance India Limited

Mahaveer Finance India Limited is an RBI-registered NBFC engaged in retail lending, with a focus on financing two-wheelers, cars, and small commercial vehicles, particularly in semi-urban and rural markets.

The company raises funds through a mix of bank borrowings, institutional funding, and debt instruments such as bonds to support its lending operations. Its business model is linked to asset-quality management, geographic diversification, and access to stable funding sources.

Security and Collateral Structure

The bonds are secured, with disclosed collateral coverage of 1.10x, meaning:

The value of collateral exceeds the outstanding bond amount by approximately 10 percent

Collateral is monitored under the supervision of the debenture trustee, in accordance with the debenture trust deed. While security may reduce loss severity in certain scenarios, it does not eliminate credit risk.

Interest Payout and Maturity Profile

Interest Payout

Interest is paid quarterly

Payments are calculated using the fixed coupon rate

Cash flows are defined upfront in the offer document

Maturity

The bond matures on 30 December 2028

Principal repayment is scheduled at maturity, subject to issuer performance

The remaining tenure influences interest-rate sensitivity and reinvestment considerations.

Key Risks Associated with Mahaveer Finance Bonds

Mahaveer Finance bonds, like all corporate debt instruments, involve several risks:

Credit Risk: Dependence on the issuer’s ability to service interest and principal

Business Risk: Exposure to retail lending and vehicle finance cycles

Interest Rate Risk: Bond price sensitivity to changes in market rates

Liquidity Risk: Potential difficulty in selling the bond before maturity

Collateral Risk: Realisable value of secured assets may vary

These risks exist regardless of coupon level or listing status.

Liquidity and Secondary Market Considerations

Although the bonds are listed, secondary market liquidity may vary. Corporate bonds generally trade less frequently than equities, and exit prices depend on:

Market demand

Interest-rate environment

Issuer-specific developments

Listing improves transparency but does not ensure ease of exit.

Common Misconceptions About NBFC Bonds

Common misconceptions include:

Secured bonds are risk-free

Credit ratings guarantee repayment

Coupon rate equals actual return

Listed bonds are always liquid

Understanding these limitations helps interpret bond disclosures accurately.

Conclusion

Mahaveer Finance bonds are structured as senior secured, listed debt instruments with fixed coupons and defined maturities. Understanding bond structure, YTM calculation, credit rating context, collateral coverage, and associated risks provides clarity on how these instruments function within India’s corporate bond market.

These bonds should be viewed as contractual obligations subject to issuer-specific and market-related uncertainties rather than as standardised or risk-free products.

Disclaimer

This blog is intended solely for educational and informational purposes. The bonds and securities mentioned herein are illustrative examples and should not be construed as investment advice or personal recommendations. BondScanner does not provide personalized investment advice through this content.

Readers are advised to independently evaluate investment options and seek professional guidance before making financial decisions. Investments in bonds and other securities are subject to market risks, including the possible loss of principal. Please read all offer documents and risk disclosures carefully before investing.