Two contrasting stories emerge from the quarterly investor presentations of the barely two-year-old Poonawalla Fincorp. There is one part about an exponential surge in business activity. In the three months ended March 2023, the nearly $3 billion non-bank posted the highest-ever quarterly profit, net income, and loan disbursals in its 23 months of operations.
But the second, not-so-obvious narrative requires some probing.
In February 2021, Adar Poonawalla, the chairperson of Poonawalla Fincorp and the chief executive (CEO) of the world’s largest vaccine maker Serum Institute of India (SII), bought bought The Ken Poonawalla Fincorp’s past could stall its Bajaj Finance-like future Read more a 60% stake in non-banking financial company (NBFC) Magma Fincorp for Rs 3,456 crore (~US$420 million) through Rising Sun Holdings Pvt. Ltd. The holding company had been active in the financial-services space through Poonawalla Finance Pvt. Ltd—a 60-member NBFC—which was then merged with Magma Fincorp. Within six months, the merged entity was rebranded to Poonawalla Fincorp.
Before the deal, Magma Fincorp had a long-standing tradition: all its investor presentations included a slide with headshots of its top management. The practice continued after Poonawalla Finance took over. It even introduced a small section called “People and Distribution” and announced the onboarding of new senior executives.
Both slides, however, have been missing since the quarter ended March 2022.
“It was because most seniors who came in after the merger quit within a year of joining. Almost all senior Magma executives also left,” a former Poonawalla Fincorp employee told The Ken.
The Ken spoke with six former Magma employees as well as three former and two current Poonawalla Fincorp employees. None of them wanted to be named as they didn’t want to be seen publicly commenting on the matter.
Older employees stepping down post a large takeover is not new. But what’s surprising is the frequency of resignations among those who joined after the rebranding in July 2021—especially the top brass.
For instance, Vijay Deshwal, former group CEO; Manish Kumar, former group chief human resource officer; Gaurav Sharma, former group chief technical officer; and Sharad Pareek, former chief risk officer, joined the non-bank around the same time after the acquisition. But none of them completed a year.
Deshwal was a former ICICI Bank employee who joined Poonawalla Fincorp in June 2021. But he was asked to leave leave The Economic Times Poonawalla Fincorp CEO Vijay Deshwal steps down; to take up new role in Cyrus Poonawalla Group Read more in about nine months, according to two Poonawalla employees. “He had very little experience in retail lending. He didn’t quite align with the company’s ambition of moving out of wholesale lending.
