Shares of Fusion Finance, a prominent financial service provider, surged by over 7.51% in Monday’s trading, reaching ₹164.20 per share. This impressive rise follows the company’s announcement regarding the successful conclusion of its ₹800 crore Rights Issue, which was oversubscribed by 150%. While the stock has seen an overall increase of 16.84% in the past month, it’s worth noting that it has experienced a decline of over 11% in the last six months.
Details of the Rights Issue
The rights offering opened on April 15 and attracted significant interest from existing institutional investors, including major stakeholders such as Honey Rose Investment Ltd, linked to Warburg Pincus LLC, and Creation Investments Fusion LLC. This level of participation highlights the confidence investors have in Fusion’s growth potential and foundational business principles.
- The rights issue consisted of up to 6,10,58,392 partly paid equity shares.
- Each share was priced at ₹131, comprising a premium of ₹121, totaling nearly ₹799.86 crore.
A Testament to Shareholder Trust
Devesh Sachdev, Managing Director of Fusion Finance Limited, remarked, “The overwhelming response to our Rights Issue showcases the unwavering trust our shareholders have in Fusion’s operational capabilities and market position. The influx of capital will not only strengthen our balance sheet but also allow us to seize emerging opportunities, ensuring we continue to provide sustainable value to all our stakeholders.”
The funds raised from this rights issue will bolster the company’s capital adequacy, solidifying its status as one of the most well-capitalized players in the Indian microfinance sector. IIFL Capital Services Limited has been designated as the Lead Manager for this issue, while CRISIL Ratings Limited will oversee compliance as the Monitoring Agency, and Axis Bank Limited has been appointed as the Banker.
Strategic Leadership Enhancements
In a recent company update, Fusion highlighted its commitment to long-term growth, particularly through advancements in its executive leadership. The appointment of Sanjay Garyali as Chief Executive Officer is a significant step in this direction. With over 28 years of expertise in banking and finance, Garyali’s leadership is expected to enhance Fusion’s approach to retail finance.
Reflecting on the rights issue’s success, Garyali stated, “This milestone underscores the strength of Fusion’s franchise and the confidence our shareholders have in us. It will empower us to solidify our foundation as we transition into the next phase, emphasizing scale, sustainability, and long-term value creation.”
As Fusion Finance continues to evolve, it aims to leverage this new capital to expand its operational strategies and drive growth in the competitive landscape of financial services.
