Adar Poonawalla-controlled Rising Sun Holdings is acquiring a majority stake in non-banking monetary business Magma Fincorp and will be infusing fresh capital into the business. This will be followed by an open offer you.
Rising Sun Holdings and Magma Fincorp on Wednesday announced a transaction for preferential situation of equity shares of Magma Fincorp for Rs 3,456 crore.
The preferential allotment represents 64.68% of Magma’s enhanced equity share capital post the situation. Based on present shareholding, Rising Sun Holding would hold 60.% stake in the entity post issuance and the current promoter group stake would get decreased to 13.3% post issuance. The net worth of Magma Fincorp will raise to more than Rs 6,300 crores post the issuance.
Following the preferential situation, Rising Sun Holdings will come to be the promoter of Magma Fincorp and Magma would be renamed and rebranded as Poonawalla Finance. The current monetary services company of Poonawalla Finance is to be consolidated into Magma Fincorp.
As portion of the transaction, Magma Fincorp proposes to allot 45,80,00,000 shares to Rising Sun Holdings, and 3,57,14,286 shares to Sanjay Chamria and Mayank Poddar. Rising Sun Holdings would be nominating Adar Poonawalla as the chairman of the board of directors and Abhay Bhutada, presently MD & CEO of Poonawalla Finance, as MD. Chamria would continue as the executive vice chairman of the Board.
Speaking on infusion of majority capital for controlling stake of Magma Fincorp, Adar Poonawalla, director, Rising Sun Holdings, stated he saw an limitless prospective in India in the monetary space as the economy was poised to develop in double digits.
Chamria stated, thinking about the positives in the deal by way of large capital infusion, powerful brand worth and capability to attract talent, the board decided to accept an offer you for a substantial equity infusion into the business. This would propel the business into a greater development trajectory, benefiting from prospective decrease expense of funds and enhanced credit rating. This infusion would also allow Magma Fincorp to additional invest in its housing finance subsidiary and basic insurance coverage JV. The BSE and NSE listed Magma has a loan book of `15,006 crore with a presence across 21 states and 298 branches with a consumer base of 5 million.