Magma Fincorp hits the roof after raising funds

Magma Fincorp hit an upper circuit limit of 5% at Rs 55 after the company said it raised Rs 350 crore from the Dutch Development Bank.

In an exchange filing made before market hours today, Magma Fincorp said that it raised Rs 350 crore by way of non- convertible debentures (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.

This investment by FMO is under voluntary retention route (VRR) for investment in Indian debt by FPI. Proceeds of the NCDs shall be utilized for the company's ongoing business operations including expansion and growth of its micro and small and medium enterprise (MSME) loan portfolio.

On the technical front, the stock's RSI (relative strength index) stood at 64.61. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was currently trading above its 50-day moving average (DMA) placed at Rs 840.52 and its 200 DMA placed at Rs 725.38.

Magma Fincorp, a non-deposit taking non-banking finance company (NBFC), is registered with the Reserve Bank of India (RBI) as an asset finance company.

On a consolidated basis, the company's net profit fell 61.4% to Rs 29.53 crore on a 6.6% increase in total income to Rs 679.87 crore in Q2 September 2019 over Q2 September 2018.

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