By buld_online 
The Poonawalla Group is planning to raise $1 billion by the end of 2025 to expand its non-banking financial company (NBFC), Poonawalla Fincorp.
The proposed capital raise may be through a Qualified Institutional Placement (QIP) or by bringing in a financial investor. The funds will be a primary infusion—no secondary component is being considered.
“We are going to probably go for a $1 billion capital raise at the end of this year via a QIP or take a financial investor into the company — all primary, no secondary,” Adar Poonawalla, CEO of Serum Institute of India (SII) and Chairman of Poonawalla Fincorp told Business Today. “Finance companies need a lot of capital to grow,” he said.
Poonawalla Fincorp currently has assets under management (AUM) of ₹35,000 crore. The company, he said, is leveraged four times against its net worth. It expects to grow at a rate of 30–40% annually, and the capital raise is intended to support that level of expansion while maintaining existing leverage levels, Poonawalla said.
While the SII remains central to the group’s operations, it is gradually increasing its involvement in financial services, insurance, and real estate. “We want to take all our capital and put it in our NBFC to grow that,” Poonawalla said.
In March, Adar Poonawalla sold his stake in Magma Insurance to Baba Ramdev-led Patanjali Ayurved and the DS Group for ₹4,500 crore. The deal altered the ownership structure of the company, with Patanjali and DS Group together acquiring a 98% stake.
The transaction was executed through Sanoti Properties, where Poonawalla held a 90% stake, making it a key vehicle in the deal. His exit from Magma Insurance reflects a shift in strategic priorities, as he reallocates resources from insurance towards expanding his financial services and lending businesses. “We even had an insurance company which we recently tied up with Baba Ramdev, as we want to focus on our NBFC business,” he said.
Real estate currently makes up about 10% of group activity. Poonawalla said they are approaching the sector with caution and partnering selectively in key locations. The group also owns the Ritz-Carlton hotel in Pune and may consider limited expansion in hospitality.
According to Poonawalla, the broader direction of India’s economic growth is opening opportunities across sectors, including finance. “With the country growing in the direction that it is, there’s opportunity,” he said.
Poonawalla Fincorp has been expanding its presence in digital lending, personal loans, and SME finance, supported by a growing credit market in India. If finalised, the $1 billion raise will be used to strengthen the NBFC’s lending capacity. “Serum will remain our primary focus,” Poonawalla said. However, financial services are increasingly becoming an important part of the group’s portfolio.
The acquisition of Magma Fincorp by the vaccine manufacturer Serum Institute of India (SII), through its holding company Rising Sun Holdings, led by Adar Poonawalla, was announced in February 2021 and completed in July 2021.
Following the acquisition, Magma Fincorp was rebranded as Poonawalla Fincorp in 2021, marking SII’s formal entry into the financial services sector. The acquisition of Magma Fincorp, a listed non-banking financial company (NBFC), by a Covid vaccine manufacturer appears to be a strategic shift aimed at tapping India’s fast-growing financial services sector, says Rajesh Pherwani, Founder and Chief Investment Officer of Valcreate Investment Managers LLP.
With a strong cash flow following vaccine sales, the group used the opportunity to make a meaningful entry into financial services through a company already listed on the stock exchanges.
“It is a well-calculated move to diversify,” Pherwani says. “By acquiring a listed company like Magma, the group immediately gets access to public markets. This brings advantages such as regular interaction with investors, greater transparency, and visibility—all of which can help build credibility with the financial community.”
Pherwani believes this move opens the door for future listings as well, allowing the company to raise capital more easily and unlock further value over time. “Since the acquisition, the company has managed to double Magma’s loan book, which clearly shows its ability to drive growth. The market capitalisation has also gone up by 4.5 to 5 times,” he says.
He adds that the overall business environment in India makes the timing favourable. “India’s growing economy and expanding middle class offer strong growth opportunities. The group is building a trustworthy brand with capable leadership, which puts it in a good position to benefit from this trend,” he says.
The company’s focus on the mid-to-high-yield segment, Pherwani said, is particularly important. “This space usually gives better margins compared to low-yield sectors, though it does require tighter control on repayment risks to get good returns on the loan book,” he explains.
Referring to the group’s recent sale of its stake in the insurance business, he says this showed the kind of value that can be created in smaller parts of the financial sector.