India's Rising Sun to acquire controlling stake in Magma Fincorp

Adar Poonawalla-led Rising Sun Private Holdings Ltd. proposed to acquire a controlling stake in India's Magma Fincorp Ltd. through a preferential allotment of equity shares worth 34.56 billion rupees, subject to shareholder and regulatory approvals.

As part of the open offer, Magma Fincorp proposes to allot 458,000,000 shares to Rising Sun, as well as 17,857,143 shares each to Sanjay Chamria and Mayank Poddar, who are acting in concert with the acquirer, according to a Feb. 10 filing. Both Chamria and Poddar are members of the promoter group, which collectively holds 24.39% stake in the company.

The preferential allotment represents 64.68% of Magma Fincorp's enhanced equity share capital after the issuance. Axis Capital Ltd. is serving as manager for the open offer. Following the transaction, Rising Sun will hold a 60% stake in the company and the existing promoter group's stake would get reduced to 13.3%. Magma Fincorp will also be renamed and rebranded under the Poonawalla Finance brand.

In addition, Rising Sun plans to nominate Poonawalla as chairman of the company's board and Poonawalla Finance Managing Director and CEO Abhay Bhutada as its managing director.

As of Feb. 10, US$1 was equivalent to 72.82 Indian rupees.