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MUMBAI: US investment firm Bain Capital has signed definitive agreements to acquire joint control in Kerala-based Manappuram Finance – India’s second-largest gold loan company.
Bain Capital will invest around Rs 4,385 crore for an 18% stake through a preferential allotment of equity and warrants at Rs 236 per share, reflecting a 30% premium over the six-month average trading price.
The deal, the largest by a private equity firm in the NBFC space, will trigger a mandatory open offer to acquire an additional 26% stake. Depending on the open offer subscription, Bain Capital’s total stake could go up to 41.7%.
In 2022, Bain Capital had acquired 25% stake in 360 One (formerly IIFL Wealth Management) for Rs 3,680 crore. In the same year, TPG acquired a controlling stake in Poonawalla Housing Finance for Rs 3,004 crore. Last year, Warburg Pincus acquired Shriram Housing Finance from Shriram Finance for Rs 4,630 crore. In Feb 2019, Blackstone acquired the entire stake in Aadhar Housing Finance held by the existing controlling shareholders by fresh infusion of Rs 800 crore.
The acquisition is through the private equity firms affiliates, BC Asia Investments XXV and BC Asia Investments XIV, in partnership with existing promoters, who will remain fully invested. “The investment is expected to strengthen operational efficiency, leadership, and market presence” the partners said in a statement.
Existing promoters (Nandkumar family) will hold 28.9% after the transaction, which is subject to regulatory approvals and closing conditions. “The journey of Manappuram Finance has been long and rewarding, delivering rich dividends to all stakeholders and investors,” said V P Nandakumar, MD & CEO of Manappuram Finance. “As we enter our next growth phase, we welcome Bain Capital as a partner. Their focus on growth will unlock new opportunities.”
Founded in 1949, Manappuram Finance has built an extensive network of 5,357 branches with 50,795 employees, serving 6.6 million customers. While known for its gold loan business, the company has diversified into microfinance, vehicle finance, housing finance, and SME lending in the last decade.
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