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PE-backed Magma Fincorp to raise $13M afresh to augment Tier II capital

03 October, 2012

Kolkata-based non banking finance company Magma Fincorp is looking to raise Rs 70 crore ($ 13 million) through an issue of cumulative redeemable non-convertible preference shares (CRNCPS) to augment its tier II capital, as per a company disclosure. The company’s June, 2012 Capital Adequacy Ratio (CRAR) stood at 17.8 per cent, and Tier II is at 5.5 per cent, down 160 basis points on a quarter-on-quarter basis.

“We are talking to both existing and fresh investors for the proposed fund raising,” said V Lakshmi Narasimhan, CFO, Magma Fincorp.

The NBFC is looking at a two stage fund raising beginning with 11 per cent CRNCPS to scoop up to Rs 50 crore on preferential allotment basis comprising of 50 lakh preference shares of Rs 100 each for cash at par. In its Series II, the company would raise Rs 20 crore through a similar instrument comprising of 20 lakh preference shares of Rs 100 each for cash at par.

Magma provides a bouquet of financial products including financing of utility vehicles & cars, commercial vehicles, construction equipment, tractors and SME loans.

In May 2011, Magma Fincorp received an investment of Rs 440 crore from Kohlberg Kravis Roberts (KKR) and the International Finance Corporation (IFC). (See our earlier copy)

Magma Fincorp scrip fell 0.78 per cent to close at Rs 63.25 a share, valuing the firm at Rs 1,200 crore on the BSE on Wednesday.

The company plans to open 29 new branches in the country and is looking at 50 per cent growth in loan disbursement target in the current financial year. It currently has 171 branches and plans to open the branches in the West and South regions.

(Edited by Prem Udayabhanu)


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PE-backed Magma Fincorp to raise $13M afresh to augment Tier II capital

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