Manappuram Finance shares slipped sharply by over 6% in intraday trade after reports emerged that the Reserve Bank of India has raised concerns over Bain Capital’s proposed acquisition of a controlling stake in the gold loan-focused non-banking finance company.
As per Reuters report, the Reserve Bank of India is uncomfortable with investors exercising control over more than one lending institution at the same time, whether banks or non-bank lenders. This regulatory stance has previously forced private equity investors holding 20% or more in multiple NBFCs to reduce their exposure.
Bain Capital had announced plans in March last year to invest in Manappuram Finance, but the deal is still awaiting final clearance from the RBI, which is the ultimate authority for approving large stake acquisitions in banks and NBFCs. While the investment has already received approvals from India’s market regulator and the Competition Commission of India, the central bank’s objections have now become a key overhang.
The proposed transaction involves Bain acquiring an initial 18% stake in Manappuram for around ₹44 billion, followed by an open offer to purchase an additional 26%. If completed, this would position Bain as one of the two controlling shareholders with significant influence over the company’s management and strategic decisions. The investments are planned through BC Asia Investments XXV and BC Asia Investments XIV.
The RBI’s concern stems from Bain’s existing control over Tyger Capital, formerly known as Adani Capital. Bain owns about 93% of Tyger Capital following its acquisition from the Adani family in 2023 through the Bain Capital Special Situations fund. Although Bain has argued that its investments in Manappuram and Tyger are routed through different funds and managed by separate teams, sources suggest this explanation is unlikely to satisfy the regulator.
To address the regulatory hurdle, Bain is reportedly exploring a phased divestment in Tyger Capital, though no formal announcement has been made. Bain Capital declined to comment on the development, while Manappuram Finance and the RBI also did not respond to media queries. Tyger Capital similarly declined to comment.
Manappuram Finance currently has a loan book of around ₹315 billion, largely driven by its fast-growing gold loan business, where loans are extended against gold collateral. In comparison, Tyger Capital has a smaller asset base of about ₹73.2 billion, spread across business, agricultural, and home loans.