Shares of Manappuram Finance surged on March 21, 2025, following the announcement that Bain Capital would acquire an 18% stake in the Kerala-based non-banking financial company (NBFC) for ₹4,385 crore ($528 million). The open offer price has been set at ₹236 per share, which represents a premium of about 30% over the six-month average trading price. This strategic move is expected to bolster Manappuram’s financial position and fuel its next growth phase.
Bain Capital’s acquisition will be executed through its affiliates BC Asia Investments XXV and BC Asia Investments XIV, allowing the private equity firm to gain joint control of Manappuram Finance. Following this deal, the total stake owned by Bain Capital could vary between 18% and 41.7% on a fully diluted basis. Existing promoters, including V.P. and Sushama Nandakumar, will retain a 28.9% stake in the company post-investment, ensuring that they remain significantly invested in the business.
The transaction is set to trigger a mandatory open offer for an additional 26% stake, which will further increase Bain Capital’s investment in the company, contingent upon shareholder and regulatory approvals. This investment is seen as a vote of confidence in Manappuram Finance, which serves over 6.59 million customers through its extensive branch network of 5,357 locations across India.
As a leader in the gold loan segment, Manappuram Finance aims to enhance operational efficiencies and expand its offerings beyond gold loans into areas such as microfinance, vehicle finance, and SME lending. Founded in 1949, the company has established itself as a diversified financial services provider.
After the announcement of Bain Capital’s intentions, shares of Manappuram Finance soared by as much as 14% in intraday trading, reflecting strong market optimism. The stock reached a record high of ₹247.55 before closing at ₹234.20, with a surge attributed to investor confidence following this strategic investment.
Analysts from various brokerages have responded positively to this news, with some raising their target prices for Manappuram Finance shares. CLSA increased its target from ₹225 to ₹270, while Jefferies raised its target price from ₹205 to ₹235, reflecting an optimistic outlook on the company's prospects in light of the new investment. However, these brokerages have also noted the importance of strong execution of the new growth strategies to fully realize potential share price gains.
Pavninder Singh, a Partner at Bain Capital, expressed enthusiasm for the partnership, stating, “We are thrilled to partner with Mr. Nandakumar and his team to support Manappuram Finance in its next phase of growth.” He emphasized that this collaboration underscores Bain Capital’s commitment to enhancing India’s financial services sector through sustainable growth.
V.P. Nandakumar, MD and CEO of Manappuram Finance, remarked, “Manappuram Finance has consistently delivered value to stakeholders, and this new partnership with Bain Capital will propel us into the next phase of growth.” The infusion of capital and expertise from Bain Capital is expected to accelerate innovation and operational efficiency, bolstering Manappuram Finance's reputation as a leading NBFC.
The deal remains subject to customary closing conditions and regulatory approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI). If approved, Bain Capital will gain the right to appoint a director to Manappuram Finance's board, reinforcing its influence over strategic decisions.
In summary, this monumental investment from Bain Capital marks a significant turning point for Manappuram Finance, positioning it for robust growth amid a competitive financial landscape. As the industry evolves, the partnership is likely to unlock further opportunities for Manappuram Finance, ensuring it remains at the forefront of India’s financial services sector.
