Adar Poonawalla has been appointed as an Additional Director in the capacity of Non-Executive Director and designated as the Chairman of Magma Fincorp w.e.f. Tuesday, subject to the approval of the shareholders.
The company has set a target to be among the top 3 NBFCs for consumer and small/medium business finance. Poonawalla is also the CEO of the Serum Institute of India, the makers of the Covishield vaccine.
Magma Fincorp is now a subsidiary of Rising Sun Holdings Private Limited (owned and controlled by Adar Poonawalla), subsequent to an equity infusion of Rs 3,456 crore as of May 6.
The process of rebranding the entities are underway. Equity infusion has resulted in the Tier-1 capital adequacy ratio of the company to increase substantially to 66.8 per cent as of May 15, with leverage standing at 1.3x as of the same date.
Magma Fincorp had infused Rs 500 crore of equity into Magma HFC on May 31, shoring up the net-worth of the HFC to around Rs 1,000 crore.
Magma HDI has received commitments for fresh capital of Rs 250 crore from ICICI Venture, Morgan Stanley PE Asia, together with a secondary sale by promoters for Rs 275 crore to comply with the RBI guidelines for ownership of stake in insurance companies. Magma shall continue to provide support and distribution for Magma HDI.