## Mahindra Finance Shares Plunge After Financial Fraud Revelation
Shares of Mahindra and Mahindra Financial Services (Mahindra Finance) witnessed a significant decline on Tuesday, dropping by 7.9% to Rs 256 per share on the Bombay Stock Exchange (BSE) during intraday trading. This sharp fall followed the company's announcement of a financial fraud and the subsequent postponement of its board meeting to review and approve its financial results for the year ended March 31, 2024.
The company disclosed the detection of a financial fraud during the final quarter of the financial year, impacting one of its branches in the North East region. The fraud involved the forgery of KYC documents, leading to the misappropriation of company funds. Investigations into the matter are ongoing, and the company estimates the financial impact to be around Rs 150 crores.
In light of this development, Mahindra Finance has deferred its board meeting, originally scheduled for April 23, to a later date. This delay is intended to allow for a thorough investigation and the implementation of necessary corrective actions.
The revelation of the fraud has shaken investor confidence, leading to a decline in the company's share price. At the time of writing, the shares were trading 4.07% lower at Rs 267.50 per share on the BSE. The company's stock has also witnessed a decline of 2.7% and 2.3% in the past month and six months, respectively.
The recent financial fraud incident has cast a shadow over Mahindra Finance's performance. The company reported a 12% year-on-year decrease in net profit to Rs 553 crore for the October-December quarter due to a rise in credit costs. However, the company's net interest income (NII) and disbursements witnessed a 10% and 7% increase, respectively, compared to the same period last year.
The company's current price-to-earnings (P/E) ratio stands at 12.17 times. Investors will be closely monitoring the progress of the fraud investigation and the company's response to this incident in the coming days.