Magma Fincorp gains after updating on liquidity position

Magma Fincorp surged 4.94% to Rs 51 after the company announced that it remains well capitalized and has capital adequacy ratio of 24.4%.

Magma Fincorp said it is a retail financier and does not have any large real estate or corporate exposure. The updates given have been in response to queries from few stake holders.

The company said it has received excellent support from the banking system and raised liabilities amounting to Rs 2136 crore entirely from long-term sources during the Jul-Sep 2019 quarter. This has further strengthened the asset-liability matching of the company.

The company has adequate liquidity cushion of over Rs 1800 crore as on 30 September 2019, a liquidity cushion of 3 times to meet all debt repayments amounting to less than Rs 650 crore due till March 2020.

The firm said it ha a strong retail and granular portfolio and therefore a strong pipeline of deals with PSU banks under the partial credit guarantee scheme (PCG) announced by the government of India, securitization and term loans.

With excellent liquidity and a strong pipeline of new funding, the firm has witnessed the cost of new funds softening, and expect the cost of borrowings to come down in Q3FY20 and onwards.

As on on 31 August 2019, 67% of the company's loan book consists of vehicle finance, 21% of loan book consists of housing finance and 12% of loan book consists of SME finance.

The firm has 394,148 accounts. Average size of disbursements is Rs 5.66 lakh. Asset under management is Rs 16,787 crore. The announcement was made after market hours yesterday, 3 October 2019.

Meanwhile, the S&P BSE Sensex was up 236 points or 0.62% to 38342.97.

On the BSE, 2995 shares were traded in the counter so far compared with average daily volumes of 18841 shares in the past one quarter. The stock hit a high of Rs 52 and a low of Rs 48.75 so far during the day.

The stock hit a 52-week high of Rs 138.2 on 02 Jul 2019. The stock hit a 52-week low of Rs 47 on 03 Oct 2019.

On a consolidated basis, the NBFC's net profit fell 84.4% to Rs 10.64 crore on a 5.9% increase in total income to Rs 651.95 crore in Q1 June 2019 over Q1 June 2018.

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.

Magma a financial conglomerate offers a bouquet of financial products including commercial finance, agri finance, SME finance and mortgage finance and has a general insurance subsidiary. Magma is focused on the rural and semi-urban sector.

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