Adar Poonawalla, CEO, Serum Institute of India, was appointed as chairman of Magma Fincorp on Monday. “Magma Fincorp has announced a series of leadership changes following the Poonawala-controlled Rising Sun Holdings acquiring controlling stake through an equity infusion of ₹3,456 crore in May 2021,” it said in a statement.

Ajay Bhutada is new MD

It has also appointed Abhay Bhutada as the Managing Director. Veteran banker Vijay Deshwal will take charge as CEO at Magma Fincorp from the first week of July. He will also be the Group CEO of Poonawalla Group’s financial services business, the release said. Deshwal is currently a business head at ICICI Bank.

More appointments

The NBFC is set to augment the leadership team further with more professionals set to join in the second quarter of the fiscal. “The rebranding of the company as a Poonawalla Group firm is underway,” the statement further said., adding that as the second wave of Covid-19 is subsiding, the new management is expected to drive business acceleration.

“At the outset, we have outlined the core strategic pillars of Magma 2.0, laying out a clear and focused direction for the company: professionally-run organisation under a new leadership team fully supported by the existing leadership, capitalise benefits from large capital base and stronger parentage, realignment of the product and geographic focus, early recognition and tackling of asset quality challenges with accelerated write-offs and buffer provisioning, robust ALM profile, and best in class risk management, technology and data analytics,” said Bhutada.

Meanwhile, for the quarter ended March 31, 2021, Magma Fincorp reported a consolidated net loss of ₹ 647.72 crore as against a net loss of ₹ 35.5 crore in the same period in the previous fiscal.

For 2020-21, its net loss was ₹558.96 crore versus a net profit of ₹27.05 crore in 2019-20. Its total revenue was down 4.9 per cent to ₹587.14 crore in the fourth quarter of 2020-21 as against ₹617.62 crore in the same period in the previous fiscal.

“The company introduced 100 per cent provisions and wrote off all accounts in the 90-plus DPD (Days Past Due) bucket in the SME lending business, 180-plus DPD bucket in the vehicle finance business and 730-plus DPD bucket in the affordable housing finance business,”it said, adding that this resulted in Gross Stage 3 Assets and Net Stage 3 Assets as on March 31, 2021 declining from 6.4 per cent to 3.7 per cent year on year and from 4.2 per cent to 1.2 per cent year on year respectively.

Apart from one-time incremental write-off impact of ₹274 crore, it has created management overlay provisions of ₹621 crore, aggregating to a one-time P&L charge of ₹895 crore.