Poonawalla-backed firm to pick majority in Magma Fincorp for $474m

Serum Institute of India CEO Adar Poonawalla. Photo: Abhijit Bhatlekar/Mint

Rising Sun Holdings (RSH) Pvt. Ltd, a company controlled by billionaire Adar Poonawalla, has agreed to buy a majority stake in Magma Fincorp Ltd in a deal valued at 3,456 crore.

The deal will be executed through issuance of preferential shares by Magma Fincorp that will result in RSH taking a 60% stake in the non-banking financial company. The deal has triggered an open offer under the Securities and Exchange Board of India’s takeover code to buy up to 26% stake from public shareholders.

The deal “is subject to shareholders’ and other regulatory approvals and represents 64.68% of MFL’s enhanced equity share capital post the issue”, according to a Magma Fincorp statement.

“Based on the current shareholding, RSH would hold 60% stake in the entity post issuance and the existing promoter group stake would get reduced to 13.3%. The net worth of Magma Fincorp shall increase to over 6,300 crore post issuance,” it said.

Post completion of the deal, Magma Fincorp and its units will be renamed and rebranded as Poonawalla Finance, subject to regulatory approvals. Also, the existing financial services business of Poonawalla Finance will be consolidated into Magma.

Strong corporate backing and substantial fund infusion is likely to have a positive effect on the credit rating of Magma, the statement said. The fund infusion will allow the company to invest in its housing finance unit and general insurance JV, it added.

“I see an unlimited potential in India in the financial space as our economy is poised to grow in double digits and this ties in with our group philosophy of serving the needs and dreams of the nation, and financial service plays an important role in supporting and fuelling the growth of our country,” said Poonawalla, director, RSH.

Sanjay Chamria, vice chairman and managing director, Magma Fincorp, added, “Considering the positives in the agreement by way of huge capital infusion, strong brand value and ability to attract top-notch talent, the board of the company has rightly decided to accept an offer for a substantial equity infusion into the company.”

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.