Adar Poonawalla to acquire Magma Fincorp


By subscribing to a Rs 3,456-crore preferential issue, Adar Poonawalla-controlled Rising Sun Holdings will acquire a 60 percent stake in non-banking financial firm (NBFC) Magma Fincorp. After the capital injection, Magma and its branches will be renamed and renamed Poonawalla Finance.

By subscribing to a Rs 3,456-crore preferential issue, Adar Poonawalla-controlled Rising Sun Holdings will acquire a 60 percent stake in non-banking financial firm (NBFC) Magma Fincorp. After the capital injection, Magma and its branches will be renamed Poonawalla Finance and rebranded.

After the problem, the preferential allotment represents 64.68 percent of the enhanced equity share capital of MFL. Growing Sun Holdings will own 60 percent of the post-emission entity, and the current shareholding of the promoter party will be reduced to 13.3 percent. MFL’s net worth will rise to over Rs 6,300 crore, the report said.

Shares of Magma ended 10 percent higher on Rs 84.95 on BSE on Wednesday.

Sanjay Chamria, Vice-Chairman and Managing Director of MFL, said the company had 300 branches with 10,000 employees spread across 22 states. With the proposed capital injection, the organization aims to boost its efficiency and operational matrix. Current promoters would infuse Rs 250 Crore and the Poonawallas would infuse Rs 3,200 Crore as their money.

Following the conclusion of the preferential allocation, the current financial services sector of Poonawalla Finance is proposed to be merged into Magma Fincorp subject to compliance with existing regulations. Adar Poonawalla will become Chairman of the Board of Directors and Abhay Bhutada will become Chief Executive Officer. Chamria will continue as Deputy Chairman of the Executive Board.

The management team will be further improved by naming a competent CEO & COO from among the best in the industry, with extensive expertise in operating major financial services firms, they added.

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