Adar Poonawalla controlled Rising Sun Holdings has proposed to acquire controlling stake in Magma Fincorp via a preferential allotment for aggregate value of Rs 3,456 crore.

Talking about the same, Sanjay Chamria, Vice President & MD of Magma Fincorp said that the company was in need of capital infusion at a huge scale. He added that the capital infusion isn't staggered and the entire Rs 3,450 crore will come in at one-go. He also said that capital adequacy will improve to 68 percent after infusion.

“This is a business in which you need to have capital infusion of a significant amount to give comfort to the bankers and to the rating agencies. Also in terms of a strong corporate backing – that gives a lot of comfort to the regulators, to the bankers and also to the employees. So, it was pretty much a win-win deal from that point of view,” he said in an interview to CNBC-TV18.

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Chamria said that the entire preferential issue is fresh money into the company. He also said that the current promoters will put in a total of Rs 250 crore in the company.

Post the infusion, Chamria said that the current promoters will remain promoters and Adar Poonawalla will take charge of company as Chairman.

Poonawalla will hold 60 percent stake in the company after fund raising, he added.

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“Post consummation of the transaction Adar Poonawalla through his company Rising Sun Holdings will have a controlling stake at 60 percent post money on a fully diluted business. We as the current promoters, who are currently at about 24.4 percent along with this infusion of Rs 250 crore additional capital will be down to about 13.3 percent and we will continue as the promoters along with Adar Poonawalla,” he said.

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(Edited by : Pranati Deva)

First Published:Feb 11, 2021 11:34 AM IST