Morgan Stanley has retained its ‘Equal-weight’ rating on Manappuram Finance, setting a target price of ₹180 per share following the announcement of Bain Capital’s strategic investment in the company. The global private equity firm is set to acquire an 18% stake through a preferential allotment at ₹236 per share, amounting to an investment of ₹4,385 crore. The deal has also triggered a mandatory open offer for an additional 26% stake at the same price. If fully subscribed, Bain Capital’s total holding could rise to 41.7%, giving it joint control alongside the existing promoters, who will retain a 28.9% stake post-deal.
Morgan Stanley sees this transaction as a meaningful milestone but notes that such deals usually result in the stock price gravitating toward the open offer level—adjusted for time value and market factors—rather than immediately re-rating substantially higher. The firm does not expect the promoters to sell any shares in this deal, which underscores their continued commitment to the business.
While the investment brings strong governance credibility and capital backing, Morgan Stanley believes near-term stock performance will largely be capped close to the open offer price. The brokerage is awaiting further details on potential changes in management and long-term strategic plans under Bain’s joint stewardship.
Manappuram Finance is among India’s leading non-banking financial companies with a significant footprint in the gold loan segment. The company is now aiming to expand rapidly in other areas including microfinance, affordable housing finance, and vehicle loans. The Bain Capital partnership, which includes warrant allotments likely over the next 4–18 months, is expected to accelerate this transformation, though execution will remain key to sustaining investor confidence.
