Magma Fincorp hits upper circuit on funds raising execution

Kolkata-based asset finance firm, Magma Fincorp traded on a positive note on Friday. The stock price took cues from announcement that it has successfully raised funds via non-convertible debentures (NCDs).

The company informed that it has raised Rs 350 crore through NCDs from Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V. (FMO), a Dutch Entrepreneurial Development Bank, to support the company’s on-going growth plans. The NCDs issued on a private placement basis are unlisted, redeemable, senior secured and transferable.

The stock exchange note further added that the investment by FMO is under voluntary retention route (VRR) for investment in Indian debt by the foreign portfolio investment (FPI). Proceeds of the NCDs shall be utilised for the company’s ongoing business operations including the expansion and growth of its micro, small and medium enterprise (MSME) loan portfolios.

Magma Fincorp reported a stable performance for the second quarter of FY20. Its gross NPA declined to 6.4 per cent from 8.7 per cent when compared YoY of the same quarter.

The stock price on Friday’s session clocked in upper circuit at Rs 55 per share on BSE.