Rising Sun Holdings’ purchase of Magma Fincorp gets CCI nod
As part of the terms of the deal, Rising Sun Holdings will be classified as a ‘promoter’ of Magma Fincorp
NEW DELHI : The Competition Commission of India (CCI) on Monday said it has cleared the ₹3,456 crore deal, which will see Adar Poonawalla-owned Rising Sun Holdings Pvt. Ltd acquiring a controlling stake in Mumbai-based asset finance company Magma Fincorp Ltd.
CCI said the transaction saw Rising Sun Holdings acquiring a 60% stake in the company through preferential allotment of equity shares, while existing promoters of Magma Fincorp, Sanjay Chamria and Mayank Poddar, acquired an additional 4.68% stake.
Rising Sun is present in the financial services space through Poonawalla Finance Pvt. Ltd, a systemically important non-deposit taking non-bank lender. Magma Fincorp is also a systemically important non-deposit taking non-banking financial company.
CCI examines the market presence of companies getting into mergers and acquisitions to ensure the merged entity would in no way affect competition in the market.
If the regulator suspects so, it suggests modifications to the transaction. CCI did not mention of any such modifications in its statement.
Magma Fincorp offers financial products, including commercial finance, agri-finance, finance to small businesses, mortgage finance and general insurance, with a focus on rural and semi-urban India, the CCI said in a statement.
On 9 March, Magma Fincorp had said that it had received the shareholders’ approval for allotting 490 million preferential shares worth ₹3,456 crore to Rising Sun Holdings and its existing promoters.
As part of the terms of the deal, Rising Sun Holdings will be classified as a ‘promoter’ of Magma Fincorp.
Magma Fincorp and its subsidiaries will also be rebranded as Poonawalla Finance, subject to regulatory approvals, Magma Fincorp had said in its statement last month.
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