FIIs scoop up 19% of Magma Leasing
Two foreign institutional investors (FIIs) - UK-based Cambridge Place Investment Management and US-based Aeneas Evolution Portfolio - are collectively picking up some 19.27% stake of the Kolkata-based financial services company Magma Leasing for a...
By TNN |
KOLKATA: Two foreign institutional investors (FIIs) — UK-based Cambridge Place Investment Management and US-based Aeneas Evolution Portfolio — are collectively picking up some 19.27% stake of the Kolkata-based financial services company Magma Leasing for a total consideration of Rs 121.82 crore.
The FIIs will infuse funds into the company through the preferential route.
While the UK-based FII will pick up 14.99% of the company’s fully diluted post-placement capital for Rs 108.10 crore, Aeneas Evolution intends to acquire 4.28% for Rs 13.72 crore. ENAM Financial Consultants acted as the advisor to the company.
Following this, Magma Leasing’s shareholding pattern will undergo a change. Post-allotment, promoters’ holding will dip to 47.67% on an enhanced equity capital of Rs 17.83 crore from 59.04% on an equity capital of Rs 14.39 crore.
On Thursday, the company’s stock closed at Rs 157 on the BSE and at Rs 159.90 on the NSE. Magma Leasing managing director Sanjay Chamria said: “The global investors’ decision to invest over Rs 121.82 crore through multiple instruments, including equity at a premium, reinforces our views on the retail financing market in India. It also reposes faith in the strategy, business model and the long-term growth prospects of the company.”
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Elaborating further, Mr Chamria said Cambridge Place Investment would pick up a stake through various routes including equity shares, optionally convertible preference shares (OCPS) and non-convertible preference shares (NCPS). It proposes to acquire 26.72 lakh equity shares of Rs 10 at a price of Rs 180, some 30 lakh OCPS of Rs 100 each and another 30 lakh NCPS of Rs 100 each at Rs 100 per NCP, both for a period of seven years. Aeneas Evolution Portfolio will snap up some 7,62,500 equity shares on preferential basis of Magma Leasing at Rs 180 per share.
The fund proceeds will not only improve the rating and strength of the company’s balance sheet, but also augment the ability to achieve higher business volumes and maintain strong growth momentum. It will also be used to ramp up business operations through a combination of product range augmentation, enhance geographic reach, improve the company’s capital adequacy ratio and secure long-term capital requirements.
In a statement issued on Thursday, Cambridge Place Investment spokesperson said: “By investing in a range of capital instruments, we have sought to provide Magma with an optimal capital platform. India represents a key market for us as we further expand our global investment platform in the financial services and real estate sectors.” Rothschild India advised Cambridge Place on this investment.
Both transactions are subject to shareholder and other statutory approvals. The company plans to seek shareholder approval at its annual general meeting scheduled for July 31, ’06.
Magma Leasing has a diversified product portfolio comprising commercial vehicle finance, car & utility vehicle finance, construction equipment finance, used commercial vehicle finance, strategic construction equipment finance and fee-based businesses. It disbursed over Rs 1819.6 crore in the financial year ’05-06.
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