Private equity firm Bain Capital on Thursday said it has entered into definitive agreements to acquire joint control in Manappuram Finance, the country’s second-largest gold loan firm, through an 18% stake for Rs 4,385 crore.
The stake will be acquired via a preferential allotment of equity shares and warrants at Rs 236 per share, implying a 30% premium over the six-month average price and a 9% premium over Thursday’s closing price.
The deal triggers a mandatory open offer. Bain will make an open offer to buy an additional 26% in Manappuram at a price of Rs 236 apiece.
In a regulatory filing, Manappuram Finance said Bain Capital, through its affiliates — BC Asia Investments XXV Limited and BC Asia Investments XIV Limited — will acquire 93 million shares each at an average price of Rs 236 per share.
Depending on the response to the open offer, Bain Capital’s ownership post-transaction will range between 18.0% and 41.7% on a fully diluted basis, including the shares that would be issued upon exercise of the warrants.
Promoters VP Nandakumar and Sushama Nandakumar held a combined 34.72% stake in Manappuram Finance as of December 2024. The existing promoters will hold a 28.9% stake in the company post-investment on a fully diluted basis, accounting for shares to be issued following warrant conversion.
India’s gold loan market is estimated at over Rs 7 lakh crore, according to PwC. However, the market penetration of gold loans is less than 6%, an indication of the huge potential to be unearthed in the space. PwC believes that given the profitable growth, historically, there is a scope for new players to enter the market.
VP Nandakumar, MD & CEO, Manappuram Finance, said the journey of Manappuram Finance has been a long and rewarding one, delivering rich dividends to all stakeholders and investors. “For me personally, it has been a privilege to lead such a dynamic company that continues to set gold standards in the NBFC sector,” he said.
Pavninder Singh, partner at Bain Capital, said Manappuram has developed a robust, diversified platform. “We look forward to providing the necessary capital, strategic resources, and operational expertise to help the company accelerate its growth and continue to lead in the industry,” he added.
Founded in 1949, Manappuram Finance has a customer base of over 6.59 million across a network of 5,357 branches, with a workforce of 50,795 employees.
Separately, Manappuram’s micro-finance arm Asirvad Micro Finance said it would withdraw its IPO draft papers due to uncertain market conditions.
