Mumbai, Feb 11 (IANS): Shares of Magma Fincorp hit the 10 per cent upper circuit on Thursday as Adar Poonawalla-led Rising Sun Holdings Private Limited has acquired 60 per cent stake in the NBFC.
Rising Sun Holdings Private Limited and Magma Fincorp Limited on Wednesday announced a transaction for preferential issue of equity shares of Magma Fincorp which will result in a controlling stake being taken by Rising Sun Holdings and an open offer as per Public Announcement made under SAST guidelines.
Around 11 a.m., shares of Magma Fincorp were at Rs 93.40, higher by Rs 8.45 or 9.95 per cent from its previous close.
The preferential allotment is for an aggregate value of Rs 3,456 crore, subject to shareholders' and other regulatory approvals.
The preferential allotment represents 64.68 per cent of Magma Fincorp's enhanced equity share capital post the issue. Based on current shareholding, Rising Sun Holding would hold 60.0 per cent stake in the entity post issuance and the existing promoter group stake would get reduced to 13.3 per cent post issuance. The Net Worth of Magma Fincorp shall increase to over Rs 6,300 crore post the issuance.
Following the preferential issue, Rising Sun Holdings would be classified as 'promoter' of Magma Fincorp. Magma Fincorp Ltd. 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 Magma Fincorp subject to compliance with extant regulations.
Rising Sun Holdings intends to nominate Adar Poonawalla as the Chairman of the Board of Directors and Abhay Bhutada, presently Managing Director & CEO of Poonawalla Finance, as Managing Director. Sanjay Chamria would continue as the Executive Vice Chairman of the Board. The management team will be further strengthened through the appointment of a professional CEO & COO. Poonawalla, is the CEO of Serum Institute of India.