Bain Capital, a global private investment firm, has entered into definitive agreements to acquire joint control in Manappuram Finance, a Kerala-based non-banking financial company (NBFC). The investment will be made through Bain Capital’s affiliates, BC Asia Investments XXV Ltd. and BC Asia Investments XIV Ltd. Despite the new partnership, the existing promoters will continue to remain fully invested in the company.
Investment Details
As part of this strategic transaction, Bain Capital will invest ₹4,385 crore to acquire an 18% stake in Manappuram Finance on a fully diluted basis. The acquisition will be conducted through a preferential allotment of equity and warrants at a price of ₹236 per share. This price reflects a 30% premium over the six-month average trading price of the company’s stock.
Mandatory Open Offer
The investment will trigger a mandatory open offer for the purchase of an additional 26% stake in the company on an expanded capital basis, excluding warrants. The open offer price has been set at ₹236 per share. Depending on the level of subscription to the open offer, Bain Capital’s total stake in Manappuram Finance will range between 18% and 41.7% on a fully diluted basis, including shares issued upon the exercise of warrants.
Post-Investment Stake Distribution
Following the completion of the transaction, the existing promoters of Manappuram Finance will hold a 28.9% stake in the company on a fully diluted basis. This calculation includes shares that will be issued upon the exercise of warrants.
Strengthening Manappuram’s Position
Manappuram Finance is India’s second-largest financier in the gold loan segment. The investment by Bain Capital is expected to further strengthen the company’s position in the financial services sector.
Leadership Perspectives on the Deal
V.P. Nandakumar, MD and CEO of Manappuram Finance, welcomed Bain Capital’s investment, stating,
“As we embark on the next phase of our growth, we are delighted to welcome Bain Capital as our new partner. Their leadership team is renowned for its commitment to excellence, and their sharp focus on growth will unlock fresh opportunities for Manappuram Finance.”
Echoing this sentiment, Pavninder Singh, Partner at Bain Capital, emphasized the firm’s commitment to India’s financial sector, saying,
“This collaboration leverages our deep expertise and commitment to sustainably expanding India’s financial services sector, while democratising access to financial products that foster entrepreneurship and wealth creation across the country.”
The partnership between Bain Capital and Manappuram Finance marks a significant development in India’s financial sector. With Bain Capital’s expertise and financial backing, Manappuram Finance is well-positioned to accelerate its growth and expand its reach in the gold loan and broader financial services industry.
