Magma Fincorp

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Magma Fincorp Limited
Public
Traded as BSE524000, NSEMAGMA
Industry Non-banking Financial Company
Founded 1988
Founder Mr. Mayank Poddar
Headquarters Kolkata, Kolkata, India
Key people
Narayan K. Seshadri, Chairman
Sanjay Chamria, Vice Chairman, CEO
Mayank Poddar, Chairman Emeritus
Services Car Loans/Lease, Vehicle Loans, Construction Equipment Loans, Refinance, SME Loans, Tractor Loans, Housing Loans, Insurance
Owner KKR
IFC
Number of employees
8800 (2016)
Website magma.co.in

Magma Fincorp Limited (MFL) is a Mumbai based non-banking financial company registered with the Reserve Bank of India as an Asset Finance Company.[1] The company operates more than 280 [2] branches in 22 states and a union territory and has a strong presence in rural and semi-rural India.[3][4][5]

History[edit]

Magma Fincorp Limited (formally known as Magma Leasing Limited) was incorporated in 1988 by Mr. Mayank Poddar and commenced operation in 1989. In 1992, the company merged with Arm Group Enterprises to strengthen its presence and later in 1996 entered retail financing business for vehicles and construction equipment.[6] In the year 2000, with the Acquisition of Consortium Finance Ltd, Magma expanded its network across Northern India. In 2007, Schrachi Infrastructure Finance merged with Magma increasing the company's footprint in southern and western India.[7] In the same year, the company formed a joint venture with International Tractors Limited (ITL) to enter tractor finance business.[8] In 2008, Magma re-branded and renamed itself as Magma Fincorp Limited.[9] In 2009, Magma inked a joint venture with German insurer HDI Gerling to enter general insurance business.[10] The company has received its R1 license in April 2011.[11] In the same year, Magma picked up 7% stake in the newly formed Experian Credit Information Company of India Pvt Ltd, the Indian arm of the global credit information services company. In 2011, Kohlberg Kravis Roberts – a large global PE firm and International Finance Corporation, an arm of the World Bank Group invested about $100 mn in Magma.[12] In 2012, Magma acquired GE Money Housing Finance and GE Money Financial Services. In 2016 Mr. Mayank Poddar stepped down as the chairman and was succeeded by Mr. Narayan K Seshadri as the new chairman.[13]

Products/Services[edit]

Magma Fincorp Limited has a "diversified product portfolio" and has a strong presence in semi-urban and rural areas. Magma's financial products include:[14]

  • Commercial Vehicles Finance
  • Cars & Utility Vehicles Finance
  • Construction & Strategic Construction Equipment Finance
  • Tractor Finance
  • SME Loans
  • Used Assets Finance
  • Suvidha (Refinance)
  • Housing Loans
  • Auto Lease
  • Insurance

Commercial Vehicle Finance[edit]

  • Finances new commercial vehicles.
  • Focuses on first-time buyers across semi – urban and rural areas.
  • Emerged as a preferred financing partner for vehicle manufacturers like Tata Motors, Mahindra & Mahindra, Ashok Leyland, Volvo and Eicher Motors among others.
  • Provides escorts services for old vehicles which are off the road for at least 3 years.

Cars & Utility Vehicles Finance[edit]

  • Provides loans to customers with or without proof of income, through its 'Income Proof' and 'Non-Income Proof' schemes, extending its service to a wide range of customers.[15]
  • Facilitates exchange schemes, where Magma buys old cars at attractive prices and finance new cars at customer-friendly terms.
  • Vertical segregation of sales, credit and collection functions has helped Magma achieve a rapid turnaround time in customer service.

Construction & Strategic Construction Equipment Finance[edit]

  • Finances construction equipment in the retail segment.
  • Magma has entered into tie-ups with Telcon and JCB and works closely with L&T, Ace, Caterpillar, Volvo and others to attain market leadership.
  • Helps customers take up large projects in India and abroad because of the LC facilities for import and export of various kinds of equipment.

Tractor Finance[edit]

  • Focused on rural tractor financing.[16]
  • Entered into a joint venture with agri-equipment manufacturer International Tractors Limited through Magma ITL Finance Limited.[17]
  • Has strategic alliances including Mahindra & Mahindra, TAFE, John Deere and New Holland.

SME Loans[edit]

  • Engaged in unsecured lending for mid and semi large corporates following comprehensive balance sheet appraisal.

Used Assets Finance[edit]

  • Initiated the financing of used commercial vehicles and financed first-time buyers and 2–15 years' old commercial vehicles through schemes addressing the needs of the lower-end customer segment.
  • Established equipment valuation norms, which were checked by independent valuation experts and resident equipment managers prior to disbursement.
  • Installed a credit programme that ensured customers’ compliance with existing practices.
  • Strengthened process to reduce turnaround time coupled with stringent mentoring of asset ad collections.

Suvidha (Refinance)[edit]

  • Magma Fincorp initiated the financing of used commercial vehicles and financed first-time buyers and commercial vehicles 2 – 15 years old through schemes addressing the needs of the lower-end of the customer segment.
  • Magma established equipment valuation norms, which were checked by independent valuers and resident equipment managers prior to disbursement.
  • Installed a credit programme that ensured the customers’ compliance with existing practices.

Magma Housing Finance[edit]

In Feb 2013, the company acquired 100% equity share capital of GE Money Housing Finance (an affiliate of GE Capital India) engaged in Housing Finance in India and the home equity loan portfolio of GE Money in two separate transactions.[18][19] Following the acquisitions, GE Money Housing Finance (GEMHF) has been renamed as Magma Housing Finance Company. This acquisition marked the entry of Magma into the mortgage finance business. Magma Housing Finance Co commenced fresh disbursement in May 2013 and started offering financing products under 3 broad product lines viz. Home Loans, Home Equity (Loan against Property) & Construction Finance.

Magma Fincorp Auto Lease[edit]

Provides financing facility to small, medium and large businesses in need of fleet of cars Serves over 140 large & medium company’s fleets across 14 states in India.

Magma HDI General Insurance Co Ltd[edit]

Magma HDI General Insurance Co Ltd. is a Joint Venture between Magma Fincorp Limited and HDI-Gerling Industrie Versicherung AG.[20] HDI Gerling is part of Talanx Group, the third largest insurance group in Germany. The entity leverages on the complementary strengths of the two companies, HDI Gerling’s product knowledge and Magma’s pan India distribution and service network with deep penetration in rural India.

  • Joint Venture agreement signed and company registered in September 2009
  • Licence for carrying out General Insurance business issued by IRDA in May 2012
  • Business operations commenced in October 2012
  • Gross Written Premiums (GWP) of Rs 96 crore collected in H2 FY13
  • GWP of Rs 430 crore collected in FY14. This was the highest by any general insurance company in its first full year of operations[21]
  • Business operating out of 73 Branches & 5 Zonal offices as on 31 May 2014
  • MHDI offers Motor Insurance, Liability Insurance, Fire Insurance, Engineering Insurance, Marine Insurance and Burglary & Risk Insurance.

Financial Results[edit]

Magma’s loan assets under management as on 31 March 2014 were valued at INR 17,877 Crore. The company disbursed INR 9,081 Crore in FY 2014. Total revenues for FY13-14 grew by 24% year over year to INR 2,117 Crore and PAT grew by 10% year over year to INR 160 Crore. In Q4, FY17 Magma reported a loss of Rs 122 crore and a lower profit of Rs 13 crore for FY17. Loss on account of NPA sale of Rs 678 crores impacted the PAT by Rs 145 crore. However, the gross and net NPA ratios improved sharply to 6.7% and 5.6% respectively as on 31 March 2017 against 9.9% and 7.5% as on 31 December 2016.

New Investments[edit]

Corporate Social Responsibility[edit]

With various CSR initiatives, Magma Fincorp spent 283.99 Lacs in FY 2015-16. The company received the Asia Pacific HRM Congress Awards 2015 in the category of Best CSR practices.

  • Collaborated with Petroleum Conservation Research Association (PCRA) to launch a nationwide Trucker’s initiative. Training workshops on improving driving habits for better mileage and fuel conservation are organized regularly. Besides, certification and installation of E-toilets are also carried out with an aim to improve the hygiene sanitation facility.
  • Provided financial assistance to 50 meritorious students from low-income families across the country with its “M-Scholar” scheme to meet a part of their education and related expenses while pursuing higher studies.
  • Pledged support for ISKCON Food Relief Foundation known as “Annamrita” for 750 students from KMC schools for a complete school year.
  • Partnered with the Friends of Tribal Society (FTS) for their Literacy Project and adopted 13 schools in rural locations across the country.
  • By organizing M-ART in several cities across the country Magma promotes and encourages art and upcoming talented artists.
  • Magma’s Corporate Volunteering Program called Magma Swayam was run through 13 locations where the local Magmaites took their time out and contributed to social good.

References[edit]

  1. ^ Fincorp Ltd, Magma. "About Us". 
  2. ^ Magma HR team
  3. ^ Mehta, Asit C. (31 March 2011). "Magma Fincorp: Buy for a target of Rs94". IndiaNotes. Retrieved 16 February 2016. 
  4. ^ "Magma Fincorp Ltd Q3fy11 Result Update". 
  5. ^ "Magma Fincorp Disbursals up 36%, Registers 23% growth in Revenue". 
  6. ^ "Magma Fincorp - A stock for rural growth !". 
  7. ^ "Information : Magma Fincorp Ltd". 
  8. ^ "Magma ties up with International Tractors". The Hindu. Chennai, India. 11 August 2007. 
  9. ^ "Magma renames itself, sees 43 percent loan disbursal growth this fiscal". 
  10. ^ "Magma inks JV with German Insurer HDI Gerling, to enter General Insurance Business". 
  11. ^ "MAGMA HDI GENERAL INSURANCE RECEIVES R1 LICENCE FROM IRDA". 
  12. ^ "Magma Fincorp Raises $100M From KKR, IFC". 
  13. ^ "Mayank Poddar steps down as Magma Fincorp Chairman". 
  14. ^ "Magma Fincorp Ltd". 
  15. ^ "Magma Fincorp Ltd: Snaphot". 
  16. ^ Chaudhari, Yuga (15 May 2014). "Non-banking Finance Companies (NBFCs) focus on tractor finance as auto sales slump". DNA India. Retrieved 16 February 2016. 
  17. ^ "Magma ITL to finance Sonalika tractor". The Economic Times. 11 August 2007. Retrieved 16 February 2016. 
  18. ^ Iyer, Satyanarayan (8 November 2012). "Magma Fincorp to buy GE Capital’s housing finance biz for Rs. 1,600 cr". The Hindu Business Line. Retrieved 16 February 2016. 
  19. ^ Leena, S. Bridget (8 November 2012). "Magma Fincorp buys GE Capital India’s home loan businesses". Live Mint. Retrieved 16 February 2016. 
  20. ^ "Magma HDI General Insurance kick-starts operation". SME Times News Bureau. 12 October 2012. Retrieved 16 February 2016. 
  21. ^ Chakraborty, Somasroy (3 August 2014). "Magma HDI General Insurance turns profitable in seven quarters". Business Standard. Retrieved 16 February 2016. 
  22. ^ "KKR, Indium, LeapFrog to invest Rs 500 cr in Magma Fincorp". 

External links[edit]