Magma Fincorp share hit upper circuit of 10% in early trade today amid report that Adar Poonawalla-led firm Rising Star Holdings was planning to buy controlling stake in financial services company Magma Fincorp via an open offer.
With today's surge, Magma Fincorp share has risen 107.1% in nine days. On January 29, the small cap stock stood at Rs 45.10 on BSE.
Since then, the stock has surged amid the Budget rally, which took benchmark indices to record highs. On January 29, Sensex closed at 46,285 and Nifty ended at 13,634. In nine sessions, Sensex has risen 5,234 points or 11.30% and Nifty has zoomed 1,533 points or 11.24%.
The stock of Mumbai-based non-banking financial company has outperformed its peers in last nine days. Bajaj Finance share has risen 17.5% or Rs 824.45 in last nine days. The stock hit an intra day high of Rs 5,559 today against close of Rs 4,734.55 on January 29.
Muthoot Finance stock has gained Rs 204.5 or 18.48% to Rs 1310.90 against close of Rs 1106 on January 29.
Bajaj Holdings share has added Rs 300.15 or 9.2% to Rs 3,550 today against close of Rs 3,249.85 on January 29.
Meawnhile, Magma Fincorp stock opened 9.95% higher at Rs 93.40 today , a fresh 52-week high, against previous close of Rs 84.95 on BSE. There were only buyers, no sellers for the stock in early trade.
Magma Fincorp share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The small cap share has gained 66.34% in one year and risen 133% since the beginning of this year. In a month, the stock has climbed 119%. Market cap of the firm stood at Rs 2,518 crore.
Apart from the report that Adar Poonawalla's firm is set to acquire controlling stake in the firm, the stock also surged after the company announced it would raise up to Rs 3,000 crore through debt in the next fiscal year.
On February 6, the board of directors approved issuance of debt securities in the nature of non-convertible debt securities for the financial year 2021-22 for an amount up to Rs 3,000 crore.
Poonawalla-led firm Rising Star will buy 60 per cent stake in Mumbai based non-banking financial company (NBFC) in a Rs 3,456 crore cash deal. The open offer is subject to receipt of statutory and other regulatory approvals.
Magma Fincorp in an exchange filing said its board has approved an open offer for issue and allotment of up to 60 per cent equity shares of the company by Rising Sun Holdings Private Limited (RSHPL), together with Sanjay Chamria and Mayank Poddar, through a preferential allotment.
In Q3, the Mumbai-based NBFC reported a 41.98 per cent fall in net profit at Rs 12.99 crore against Rs 22.39 crore during the same period last year.
Sales declined 3.24 per cent to Rs 589.33 crore compared to Rs 609.06 crore during the previous quarter ended December 2019. Magma Fincorp's loan disbursements rose 45 per cent YoY on the back of rise in used assets and affordable housing segments.
Incorporated in 1978, Magma Fincorp is a small-cap company that operates through more than 295 branches in 22 states and a union territory and has a strong presence in rural and semi-rural India.