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ICRA has placed Magma Fincorp's LT ratings on watch with developing implications

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Magma Fincorp announced that ICRA has placed the ratings on the company's Long Term Fund based term loans (ICRA AA-) on watch with developing implication.

ICRA has given the following rationale for the same:

ICRA is of the view that pursuant to announcement made by Magma regarding change in shareholding of the Company following the proposed capital infusion of Rs 3,456 crore of equity through preferential issue by Adar Poonawalla-controlled Rising Sun Holdings, Chamria and Poddar.

The proposed capital infusion would be a positive for the group's capitalisation profile and would provide capital for both absorbing losses as well as fund growth over the medium term. The transaction is subject to regulatory approvals and ICRA would monitor the developments on this transaction and would take suitable rating action once it has clarity on the proposed business model of the company and the likely impact on the various credit metrices, and other organization related changes.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Wed, February 17 2021. 17:08 IST