Adar Poonawalla takes charge as Magma Fincorp's Chairman, to turn as Poonawalla Group Company

By siliconindia  |  Monday, 31 May 2021, 06:32:40 PM IST

Adar Poonawalla takes charge as Magma Fincorp's Chairman, to turn as Poonawalla Group Company

Magma Fincorp appoints Adar Poonawalla as its chairman as part of a management overhaul following the Poonawala controlled Rising Sun Holdings acquiring a controlling stake in it.

Rising Sun invested 3,456 crore in the non-bank lender earlier this month. Magma will soon be rebranded as Poonawalla Group Company. The lender has also appointed Abhay Bhutada as its managing director and Vijay Deshwal as chief executive officer.

Deshwal, at present is the business head at ICICI Bank, will assume charge at Magma from the first week of July. He will also be the Group CEO of Poonawalla Group’s financial services business.

Magma today reported widening of net losses to 626 crore in the March quarter compared with Rs35 crore loss in the year ago period on account of aggressive provisioning to cover stressed assets. The company's revenue also shrunk to Rs 446 crore from Rs 524 crore over the same phase.

It cleared its balance sheet by writing off all default accounts beyond the 90 days past due in the SME lending business, beyond 180 days past dues in the vehicle finance business and over 730 days past dues in the affordable housing finance business. It has also made 100 percent provisions against these accounts, leading to a rise in provision coverage ratio to 68.6percent from 36.5 percent last year.

"The balance sheet has been strengthened significantly through the equity infusion, with the Tier1 capital adequacy ratio standing at 66.8 percent, and leverage at 1.3 times as on 15 May," the company said in a note.

Based on one-time incremental write-off impact of 274 crore, the company has created management overlay provisions of 621 crore, aggregating to a one-time profit and loss charge of 895 crore. The Company said it has created capital buffers and opted for aggressive write off policies in line with a bank structure.

 

ON THE DECK

siliconindia