Fusion MFI jumps 8%; Warburg Pincus offloads 10% stake for Rs 780 crore

Fusion Micro Finance shares jumped 8 percent in early trade on December 14. Global private equity firm Warburg Pincus pares its stake in the company, as 1.3 crore shares or 10 percent equity exchanged hands at Rs 599 per share, in a pre-open block window.

Honey Rose Investment, an arm of Warburg Pincus, was to offload a 9.25 percent stake in a block deal. The deal size is valued at Rs 500 crore, with the floor price set at Rs 535 per share.

According to the reports, the deal was to happen at a discount of 4.9 percent against December 13’s closing price. However, the deal went through at a premium of 6.4 percent, with a total value of Rs 778.7 crore.

As of 9.30 am, shares of the company were trading at Rs 604.05, higher by 7.3 percent on the NSE. The NBFC settled 0.67 lower at Rs 562.75 apiece on the NSE at the end of the December 13 trading session.

Warburg Pincus’s Honey Rose is a promoter of Fusion Micro Finance, and held a 39.22 percent in the firm. After the stake sale, the total shareholding will come down to 29.22 percent.

As of the September quarter shareholding pattern, promoters hold 67.9 percent in the firm. FIIs and DIIs have shareholdings of 5.2 percent and 15.4 percent respectively.

IIFL Securities is the sole broker for the deal. A lock-in period of 60 days would also come into effect when the deal is executed.

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Over the month, Warburg Pincus has reduced its stake in various domestic companies, like Computer Age Management Services (CAMS), IDFC First Bank, and Bharti Airtel in the past week, offloading shares that have netted the investment firm over Rs 5,000 crore.

Fusion Micro Finance reported a net profit of Rs 126 crore in Q2FY24, 32 percent higher than Rs 95 crore clocked in the year-ago period. The company’s total income increased to Rs 571.26 crore compared to Rs 452.3 crore in the September 2022 quarter.

The microfinance entity’s shares have surged by over 52 percent year-to-date. In comparison, the benchmark index Nifty 50 has gained around 15 percent during the same time period.

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