Magma Fincorp spurts on plan to apply for banking license

The announcement was made after market hours on Wednesday, 26 June 2013.

Meanwhile, the S&P BSE Sensex was up 206.70 points, or 1.11%, to 18,758.82.

On BSE, 6,569 shares were traded in the counter as against an average daily volume of 51,224 shares in the past one quarter.

The stock hit a high of Rs 92 and a low of Rs 89.45 so far during the day. The stock had hit a record high of Rs 110.40 on 10 January 2013. The stock had hit a 52-week low of Rs 57.40 on 29 June 2012.

The stock had underperformed the market over the past one month till 26 June 2013, falling 10.06% compared with the Sensex's 5.85% fall. The scrip had, however, outperformed the market in past one quarter, rising 2.93% as against Sensex's 0.81% fall.

The mid-cap company has an equity capital of Rs 37.99 crore. Face value per share is Rs 2.

Magma Fincorp said that its board approved the company's proposal to make an application seeking a banking license from the Reserve Bank of India (RBI).

Applicants seeking new banking licences are required to submit their applications to the RBI by 1 July 2013.

Entities in the private and public sector and NBFCs will be eligible to set up a bank through a wholly-owned Non-Operative Financial Holding Company (NOFHC). However, they need to have sound credentials, integrity and financials with a successful track record of 10 years.

Magma Fincorp's consolidated net profit jumped 85.3% to Rs 44.15 crore on 53.9% growth in total income to Rs 505.94 crore in Q4 March 2013 over Q4 March 2012.

Magma Fincorp is one of the largest non-banking finance companies (NBFC) in India engaged in providing commercial vehicle finance, construction equipment finance, car and utility vehicle finance, Suvidha loans (refinance), strategic construction equipment finance, tractor finance, SME loans and loans against gold to individual and corporate customers.

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