Adar Poonawalla-controlled Rising Sun Holdings has proposed to acquire a 60 per cent stake in Magma Fincorp through a preferential allotment for aggregate value of Rs 3,456 crore. This will trigger an open offer for 26 per cent in the Kolkata-based non-banking financial company (NBFC).

After the deal, Rising Sun Holdings, the existing financial services business of the Poonawalla family, will be consolidated into Magma Fincorp. The Poonawalla family owns and controls Serum Institute of India. The merged financial entity will be renamed Poonawalla Finance.

“As a part of the deal, Magma Fincorp will allot 458 million (45.8 crore) shares to Rising Sun Holdings and 35 million (3.5 crore) shares to Sanjay Chamria and Mayank Poddar (the existing board members),” Magma and Poonawalla Finance have said in a joint statement.

Talking about the deal, Magma Fincorp Vice-President and MD Sanjay Chamria has said that the company has been in need of capital infusion at a huge scale. He has added that the capital infusion is not staggered, and the entire Rs 3,450 crore will come in at once. The capital adequacy will improve to 68 per cent after the infusion, he has added.

Magma Fincorp, which began operations nearly three decades ago as a non-deposit-taking NBFC, is present across 21 States with 298 branches. It serves more than 50 lakh customers and manages a loan book of Rs 15,000 crore. This deal will enable Magma to further invest in its housing finance subsidiary and general insurance joint venture.