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Co-promoters of Magma sell 5.6% stake

Co-promoters of Magma sell 5.6% stake
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First Published: Fri, May 27 2011. 11 49 PM IST
Updated: Fri, May 27 2011. 11 49 PM IST
Kolkata: The Todi family, co-promoters of Kolkata-based non-banking finance company (NBFC) Magma Fincorp Ltd, on Friday announced it had sold its 5.62% stake to the other promoters of the firm, Mayank Poddar, Sanjay Chamria and their associates.
Poddar is the firm’s chairman and Chamria its vice-chairman and managing director.
Earlier this week, Magma announced a deal to raise Rs440 crore from the sale of shares to a private equity fund run by Kohlberg Kravis Roberts and Co. LP and the International Finance Corp.
Magma, which had assets worth Rs 10,907 crore on its balance sheet at the end of March, is one of the leading retail asset finance companies in India.
It sold shares to private equity investors for Rs88 apiece—18% higher than its current market price of Rs74.50. At Friday’s closing price, the Todi family’s stake in Magma is worth around Rs55 crore. They did not disclose the price at which they sold their shares.
The Todi family got shares in Magma when in August 2006 an NBFC founded by them, Shrachi Infrastructure Finance Ltd (SIFL), was merged with Magma.
S.K. Todi, SIFL’s erstwhile chairman, was appointed non-executive vice-chairman of Magma, and his son Ravi Todi its joint managing director.
At that time, the Todi family held 8.2% of Magma’s shares; their stake got diluted through subsequent share sales.
Following SIFL’s integration with Magma, the Todis have decided to focus on their Shrachi group, which has interests in real estate, healthcare, farm equipment and engineering, Magma said in a statement. Both S.K. Todi and Ravi Todi on Friday announced they had resigned from Magma’s board.
“The merger… has significantly contributed to Magma’s robust growth in the recent past,” Magma’s statement quoted Chamria as saying.
The Todi family had a put option on its stake in Magma under the 2006 merger agreement, according Rahul Todi, younger son of S.K. Todi and a spokesperson for the family. “We decided to exercise the put option now because we feel retail asset financing is no longer part of our core operations,” he said.
manish.b@livemint.com
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First Published: Fri, May 27 2011. 11 49 PM IST