PROJECT

Projects

Summary of Proposed Investment

Project Number

30569

Company Name

POONAWALLA FINCORP LIMITED

Date SPI Disclosed

May 16, 2011

Country

India

Industry

Financial Markets

Projected Board Date

Jun 16, 2011

Status

Completed

Sector

Commercial Banking - SME Finance

Date Revised SPI Disclosed

Aug 25, 2011

Department

Global Industry, Financial Markets

Environmental Category

FI

Previous Events

Approved : Jun 16, 2011
Signed : Jun 24, 2011
Invested : Jun 30, 2011

Project Description

IFC has recently made an equity investment of about $45 million in Magma Fincorp Limited (“Magma” or “the Company”). Magma is a medium sized NBFC in India, headquartered at Kolkata, with a presence in 21 Indian states and a focus on the rural and semi-urban markets. The Company provides a wide suite of financing against - commercial vehicles (CV), construction equipments (CE), tractors, cars and multi-utility vehicles and also provides loans to small and medium enterprises (SME) – to address the needs of the financially underserved markets in rural and semi-urban India. The Company has invested significantly in a large branch network, efficient service and customer relationship management resulting in superior origination capacity in the market enabling sustained business growth. Magma is a listed entity with market capitalization of INR9.47 billion ($210 million) as on June 30, 2011. Magma has assets under management (“AUM”) of $2.1 billion as on March 31, 2007, and has shown consistent growth over the last 20 years. Magma now plans to leverage this financial infrastructure to drive the next phase of growth, by increasing its presence in rural and semi-urban areas, expanding within the low income states (“LIS”), as well as expanding its product line.

Magma has raised fresh capital of about $100 million through new equity issuance. The infusion will enable Magma to provide for sufficient capital to address the following: (i) further expansion in rural, semi-urban areas with a focus on LIS; (ii) grow the new product portfolio (used CVs, tractors and SME); and (iii) meet capital adequacy requirement.

Note on Disclosure: This is a revised SPI published with the disclosure of the project company’s name and other details, which were not disclosed in the earlier SPI released on May 16, 2011 because of risk of impacting market conditions. It is done pursuant to paragraph 9 (d) of IFC’s Policy on Disclosure of Information, which requires a revised SPI to be published containing all standard SPI information after the disbursement of the proposed IFC investment (or earlier), when the information pending disclosure is no longer commercially sensitive.

Sponsor / Cost / Location

Development Impact