The Poonawalla Group is planning to boost $1 billion by the tip of 2025 to broaden its non-banking monetary firm (NBFC), Poonawalla Fincorp.
The proposed capital elevate could also be by way of a Certified Institutional Placement (QIP) or by bringing in a monetary investor. The funds shall be a major infusion—no secondary part is being thought-about.
“We’re going to most likely go for a $1 billion capital elevate on the finish of this 12 months by way of a QIP or take a monetary investor into the corporate — all major, no secondary,” Adar Poonawalla, CEO of Serum Institute of India (SII) and Chairman of Poonawalla Fincorp informed Enterprise Right this moment. “Finance firms want a number of capital to develop,” he mentioned.
Poonawalla Fincorp at the moment has property below administration (AUM) of ₹35,000 crore. The corporate, he mentioned, is leveraged 4 occasions in opposition to its web value. It expects to develop at a price of 30–40% yearly, and the capital elevate is meant to assist that stage of enlargement whereas sustaining current leverage ranges, Poonawalla mentioned.
Whereas the SII stays central to the group’s operations, it’s regularly rising its involvement in monetary providers, insurance coverage, and actual property. “We wish to take all our capital and put it in our NBFC to develop that,” Poonawalla mentioned.
In March, Adar Poonawalla bought his stake in Magma Insurance coverage to Baba Ramdev-led Patanjali Ayurved and the DS Group for ₹4,500 crore. The deal altered the possession construction of the corporate, with Patanjali and DS Group collectively buying a 98% stake.
The transaction was executed by way of Sanoti Properties, the place Poonawalla held a 90% stake, making it a key car within the deal. His exit from Magma Insurance coverage displays a shift in strategic priorities, as he reallocates sources from insurance coverage in direction of increasing his monetary providers and lending companies. “We even had an insurance coverage firm which we just lately tied up with Baba Ramdev, as we wish to concentrate on our NBFC enterprise,” he mentioned.
Actual property at the moment makes up about 10% of group exercise. Poonawalla mentioned they’re approaching the sector with warning and partnering selectively in key areas. The group additionally owns the Ritz-Carlton lodge in Pune and will contemplate restricted enlargement in hospitality.
In keeping with Poonawalla, the broader course of India’s financial development is opening alternatives throughout sectors, together with finance. “With the nation rising within the course that it’s, there’s alternative,” he mentioned.
Poonawalla Fincorp has been increasing its presence in digital lending, private loans, and SME finance, supported by a rising credit score market in India. If finalised, the $1 billion elevate shall be used to strengthen the NBFC’s lending capability. “Serum will stay our major focus,” Poonawalla mentioned. Nevertheless, monetary providers are more and more turning into an necessary a part of the group’s portfolio.
The acquisition of Magma Fincorp by the vaccine producer Serum Institute of India (SII), by way of its holding firm Rising Solar Holdings, led by Adar Poonawalla, was introduced in February 2021 and accomplished in July 2021.
Following the acquisition, Magma Fincorp was rebranded as Poonawalla Fincorp in 2021, marking SII’s formal entry into the monetary providers sector. The acquisition of Magma Fincorp, a listed non-banking monetary firm (NBFC), by a Covid vaccine producer seems to be a strategic shift geared toward tapping India’s fast-growing monetary providers sector, says Rajesh Pherwani, Founder and Chief Funding Officer of Valcreate Funding Managers LLP.
With a robust money move following vaccine gross sales, the group used the chance to make a significant entry into monetary providers by way of an organization already listed on the inventory exchanges.
“It’s a well-calculated transfer to diversify,” Pherwani says. “By buying a listed firm like Magma, the group instantly will get entry to public markets. This brings benefits reminiscent of common interplay with traders, higher transparency, and visibility—all of which can assist construct credibility with the monetary group.”
Pherwani believes this transfer opens the door for future listings as properly, permitting the corporate to boost capital extra simply and unlock additional worth over time. “Because the acquisition, the corporate has managed to double Magma’s mortgage e book, which clearly exhibits its potential to drive development. The market capitalisation has additionally gone up by 4.5 to five occasions,” he says.
He provides that the general enterprise surroundings in India makes the timing beneficial. “India’s rising financial system and increasing center class provide robust development alternatives. The group is constructing a reliable model with succesful management, which places it in a great place to learn from this pattern,” he says.
The corporate’s concentrate on the mid-to-high-yield phase, Pherwani mentioned, is especially necessary. “This house normally offers higher margins in comparison with low-yield sectors, although it does require tighter management on reimbursement dangers to get good returns on the mortgage e book,” he explains.
Referring to the group’s current sale of its stake within the insurance coverage enterprise, he says this confirmed the sort of worth that may be created in smaller elements of the monetary sector.
