Rising Sun Holdings, a company controlled in a personal capacity by Serum Institute of India CEO Adar Poonawalla, announced a transaction on February 10 to acquire a controlling stake in Magma Fincorp (MFL), a non-banking financial company (NBFC).
The deal will be carried out via a preferential issue of Magma Fincorp’s equity shares worth Rs 3,456 crore. The deal also includes an open offer as per SEBI norms.
According to an official statement, the deal “ is subject to shareholders’ and other regulatory approvals and represents 64.68 percent of MFL’s enhanced equity share capital post the issue. Based on current shareholding, Rising Sun Holding would hold a 60 percent stake in the entity post-issuance and the existing promoter group stake would get reduced to 13.3 percent post-issuance. The net worth of MFL shall increase to over Rs 6,300 crore post the issuance.”
Following the preferential issue, Rising Sun Holdings would be classified as the promoter of MFL. MFL and its subsidiaries shall be renamed and rebranded under the brand name “Poonawalla Finance”, subject to regulatory approvals.
Subsequent to the completion of the preferential allotment, the existing financial services business of Poonawalla Finance is proposed to be consolidated into MFL subject to compliance with extant regulations.
“I am excited at this opportunity to infuse majority capital for controlling stake of MFL. I see 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. This transaction is subject to statutory and regulatory approvals,” said Poonawalla, Director, Rising Sun Holdings.