KKR,IFC invest Rs 440 cr in Magma Fin

Magma Fincorp said global fund manager Kohlberg Kravis Roberts and IFC will invest Rs 440 cr in it.

Non-banking finance firm Magma Fincorp today said global fund manager Kohlberg Kravis Roberts & Co (KKR) and International Finance Corporation (IFC) will invest Rs 440 crore in the company.

Following the investment,KKR would hold 14.95 per cent stake in Magma while IFC would have 12.8 per cent shareholding in the company.

These funds would be utilised for Magma’s growth and expansion activities.

“With this capital infusion,we believe Magma is well positioned to capitalise on its existing business opportunities,increase its thrust into new products in addition to accretive M&A,” Magma Vice Chairman & Managing Director Sanjay Chamria said in a statement.

Magma’s expects to increase its disbursements by 50 per cent in FY’12. The company has more than 2.36 lakh customers and has assets of Rs 10,907 crore under management.

Ernst & Young (Advisory) and Wadia Ghandy advised Magma on the transaction.

According to the statement,IFC’s investment would help Magma to expand its footprint in Bihar,West Bengal,Orissa,Chattisgarh and Rajasthan.

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As part of the deal,Magma would allot 2.68 crore shares to Zend Mauritius VC Investments Ltd,which is part of KKR,and 2.30 crore shares to IFC. These allotments would be made on a preferential basis.

The proposed share allotments have been approved by the company’s board of directors at their meeting held today,according to a regulatory filing.