The Competition Commission of India approved Adar Poonawalla-led Rising Sun Holdings Pvt Ltd.’s acquisition of a 60% stake in Magma Fincorp.
The commission approves the acquisition of shareholding in Magma Fincorp Ltd. by Rising Sun Holdings, Sanjay Chamria and Mayank Poddar, the CCI said in a post on Twitter on Monday.
Rising Sun Holdings notified the CCI of the deal in March, which involved the preferential allotment of shares worth ₹3,200 crore. As part of the deal, Magma Fincorp promoters Sanjay Chamria and Mayank Poddar will get a 4.68% stake in the NBFC for Rs 250 crore.
The transaction would result in a total capital infusion of ₹3,456 crore into Magma Fincorp, with the company’s net worth rising to over Rs 6,300 crore.
In its filing, Rising Sun Holdings said the acquisition would bring higher efficiencies in its existing business in the financial lending space and would expand and diversify its operations to other business areas where Magma Fincorp was present.
Rising Sun Holdings is in the business of investments and leasing property through its subsidiary Poonawalla Finance Pvt Ltd., apart from the production of hygiene products, exhibiting art and cultural artifacts and providing management consultancy services through associated firms.
Magma Fincorp is a systemically important non-deposit taking NBFC engaged in financing commercial projects, agriculture and small and medium enterprises, mortgage finance and general insurance. The firm focuses on providing these services in rural and semi-urban areas.
In February, Poonawalla had made an open offer to Magma Fincorp for the stake, which would see Rising Sun Holdings become its promoter.
The NBFC and its subsidiaries would be rebranded Poonawalla Finance, with the existing businesses of Poonawalla Finance to be consolidated into Magma Fincorp.
Adar Poonawalla is also the CEO of the Serum Institute of India, the world’s largest manufacturer of vaccines, including Covishield.
