The Poonawala Group on Monday announced a new management structure for Magma Fincorp, which it had taken over for Rs 3,456 crore, appointing a new chairman, managing director, and a chief executive.
The <a href="https://www.mid-day.com/news/india-news/article/never-exported-vaccines-at-the-cost-of-people-in-india-adar-poonawalla-23173916" target="_blank" rel="noopener">Adar Poonawalla</a>-controlled Rising Sun Holdings, the financial services arm of the group known globally for its vaccines, had completed the acquisition of the city-based non-bank lender earlier this month.
The board of Magma appointed Adar Poonawalla as the Chairman while Abhay Bhutada, who is the Chief Executive of the Poonawala Finance, will be the Managing Director. Vijay Deshwal, a seasoned banker with a track record of over two decades, will take over as the Chief Executive of Magma Fincorp from July, according to a statement.
Sanjay Chamria will continue as the Vice Chairman of the company and will guide the new team during the transition, the company said.
Deshwal, currently a business head at ICICI Bank responsible for its services sector, including new-age businesses and driving the liability strategy for the corporate ecosystem, will also be the Group Chief Executive Officer of Poonawalla Group's financial services business.
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The changes reflect Magma's transition into the next phase of growth and the ongoing commitment to achieving better corporate governance standards, the statement said.
With the acquisition, the balance sheet of the NBFC has been strengthened significantly through the equity infusion, with the tier-1 capital adequacy ratio standing at 66.8 per cent and leverage at 1.3 times as of May 15.
It also said there will be more hands in the leadership team by the second quarter and that the rebranding of Magma a Poonawalla Group firm is also underway.
Magma has improved its operating performance in the financial year 2020-21 and reported an increase in NIMs, reduction in operating expense ratios, and cost of funds.
A higher write-off led the company to report an Rs 863.58 crore net loss on a standalone basis in the March quarter as against Rs 17.36 crore profit in the December 2020 quarter and Rs 4.11 crore a year ago. For the full year to March 2021, its losses amounted to Rs 748.76 crore as against a net income of Rs 81.78 crore in the financial year 2019-20.
The company attributed the heavy loss to the one-time incremental write-off of Rs 274 crore, and an overlay provision of Rs 621 crore, aggregating to a one-time credit loss of Rs 895 crore for the year.
Disbursals have been lower resulting in a lower AUM to Rs 14,225 crore. But with a capital infusion of Rs 3,456 crore, Magma is adequately capitalised to usher in a period of growth and superior risk-return ratios and RoA and RoE, it said.
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The changes reflect Magma`s transition into the next phase of growth and the ongoing committment to achieving better corporate governance standards, a statement said.

Adar Poonawalla joins Magma Fincorp as chairman 

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The changes reflect Magma's transition into the next phase of growth and the ongoing committment to achieving better corporate governance standards, a statement said.

Adar Poonawalla joins Magma Fincorp as chairman

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Adar Poonawalla joins Magma Fincorp as chairman

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