Poonawalla to take over Magma Fincorp

MUMBAI: The Poonawalla Group is acquiring a controlling 60 per cent stake in non-banking finance firm Magma Fincorp by subscribing to a Rs 3,456-crore preferential issue, the Pune-based company, better known for the Serum Institute, said on Wednesday.

The company, which has a fledgeling NBFC arm called Poonawalla Finance which lends mostly to professionals, said the acquisition will be done through a group company called Rising Sun Holdings.

The transaction, subject to shareholders and regulatory nods and through a preferential issue of equity shares of Magma Fincorp worth Rs 3,456 crore, will result in Rising Sun taking over the company with 60 per cent stake and an open offer under applicable Sebi guidelines, the statement said.

As part of the transaction, Magma Fincorp proposes to allot 45.80 crore or 60 per cent shares to Rising Sun, and 3.57 crore shares to Sajnay Charmia and Mayank Poddar.

The preferential allotment represents 64.68 per cent of Magma's enhanced equity share capital post-issue and based on the current shareholding, Rising Sun will hold 60 per cent stake and the existing promoter group's stake will come down to 13.3 per cent.

The equity infusion will result in the networth of Magma Fincorp rising to over Rs 6,300 crore.

Post-preferential issue, Rising Sun Holdings will become the promoters of Magma Fincorp and its subsidiaries, which all will be renamed as Poonawalla Finance.