Adar Poonawala to Acquire 60% Stake in NBFC Magma Fincorp

Adar Poonawalla controlled investment firm Rising Sun Holdings will buy a controlling stake in Magma Fincorp with an investment of Rs. 3,200 crore reflecting a gradual return of investor interest in non-banking finance companies, which lost charm since the collapse of

BY Realty Plus
Published - Saturday, 13 Feb, 2021

Adar Poonawala to Acquire 60% Stake in NBFC Magma Fincorp

Adar Poonawalla controlled investment firm Rising Sun Holdings will buy a controlling stake in Magma Fincorp with an investment of Rs. 3,200 crore reflecting a gradual return of investor interest in non-banking finance companies, which lost charm since the collapse of infrastructure conglomerate IL&FS more than two years ago. Rising Sun Holdings will hold 60 per cent in the entity post-issuance, and the existing promoter group's stake will get reduced to 13.3 per cent. The net worth of MFL will increase to over Rs 6,300 crore. Following the preferential issue, Rising Sun Holdings would be classified as “Promoter” of Magma Fincorp. Adar Poonawalla and Magma Fincorp clearly believe that the transaction would be in the best interests of all the stakeholders and that post-transaction, Magma Fincorp would be uniquely placed to leverage the vast opportunities in the lending space with an expected reduction in borrowing cost. Strong corporate backing and substantial fund infusion are likely to have a positive effect on the credit rating of the company as well. This infusion would also enable Magma Fincorp to further invest in its Housing Finance subsidiary and General Insurance joint venture, as required, the company said.