Shares of Magma Fincorp settled for the day with gains of over 14 per cent after the non-bank lender said it is planning to raise additional capital through preferential issue of shares.
Magma Fincorp today said private equity funds KKR, Indium and LeapFrog will invest Rs 500 crore in the company through preferential shares to spur business expansion.
Reacting to the news shares of the company opened on a bullish note at Rs 87.95, then surged as much as 17.25 per cent to an intra-day high of Rs 97.50. At the end of today's trade the stock, however, pared some gains and was quoted at Rs 94.90, up 14.13 per cent over its previous closing price.
Pursuant to the spike in the share price, the market capitalisation of the company improved by a whopping Rs 224.11 crore to Rs 1,807.14 crore.
Indium, an investment vehicle advised by India Value Fund Advisors, will be investing Rs 220 crore, while emerging market investor Leapfrog Investments will infuse Rs 200 crore, the Kolkata-based lender said in a statement.
American private equity KKR, which first invested in the company in 2011, is doing a follow-up investment of Rs 80 crore.
"Magma will use the new capital to grow its business and capture opportunities created by India's economic growth and improving financial markets," the company said in a regulatory filing.
The investors come with "long-term strategic capital" which will help the company in the next level of its growth, the company's managing director Sanjay Chamria said.
