Last updated: 19 Feb, 2021 | 10:18 am
Details of the deal
Why is the deal being done?
Share price reaction
In the past two weeks, Magma Fincorp's shares have been on a rising spree after its robust performance in Oct- Dec 20 earnings. The announcement of the deal has led to further rally in the stock, with the stock consistently hitting upper circuit in the last few days. The shares have gained more than 160% in the month so far.
Actions by rating agencies and brokerages
ICRA places rating on hold with developing implications
Following the announcement of the deal, ICRA has placed the rating of the company's long-term fund-based term loans on watch with developing implications. ICRA said that 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.
ACUITE places ratings on watch with positive implications
ACUITE has also placed the company's unsecured subordinated redeemable non-convertible debentures under watch with positive implication. ACUITE has said the expected equity infusion will strengthen the capital position of Magma and its subsidiaries in a very significant manner which in turn will help to enhance its business profile over the medium term.
According to ICICI Securities, the new promoter and management will leverage the company's niche products, geography and customer franchise to improve its market positioning and capitalise on growth opportunities. ICICI Securities has a \'Buy'on the stock with a target price of Rs 125.