Shares of Manappuram Finance will be in focus tomorrow on March 21 after the company’s board approved a significant ₹4,384.94 crore preferential issue, with Bain Capital emerging as a key investor.
Bain Capital, through its affiliates BC Asia Investments XXV Limited and BC Asia Investments XIV Limited, will acquire an 18% stake in Manappuram Finance for ₹4,385 crore via preferential allotment of equity shares and warrants at ₹236 per share. This valuation is approximately 30% higher than the six-month average trading price.
The transaction will also trigger a mandatory open offer for an additional 26% stake in the company, with the open offer price set at ₹236 per share. Depending on the response to the open offer, Bain Capital’s final stake in Manappuram Finance will range between 18% and 41.7% on a fully diluted basis, including shares issued through the exercise of warrants. Meanwhile, the existing promoters will retain a 28.9% stake in the company. The deal remains subject to customary closing conditions and regulatory approvals.
This strategic investment aims to propel Manappuram Finance into its next phase of growth by improving operational efficiencies, expanding leadership, and strengthening its financial services platform. The partnership with Bain Capital is expected to provide the company with additional capital and expertise to accelerate its growth in gold loans, vehicle finance, SME lending, and microfinance.
As part of the restructuring, Bain Capital will obtain joint control of Manappuram Finance alongside existing promoters. The investment firm will have the right to appoint key executive management personnel, including the CEO and other senior leaders. Additionally, the company’s board will be restructured to include two nominee directors from Bain Capital.
Manappuram Finance will also increase its authorized share capital from ₹200 crore to ₹300 crore to accommodate the preferential issue. The company plans to amend its Articles of Association (AOA) to reflect new provisions, including warrant issuance and convertible securities. An Extraordinary General Meeting (EGM) has been scheduled for April 16, 2025, where shareholders will vote on these changes.
In a parallel development, Manappuram Finance has announced the acquisition of a 99.91% stake in Manappuram Asset Finance Limited (MAFL), making it a subsidiary. MAFL operates as a non-banking financial company (NBFC), specializing in gold loans, mortgage loans, and business financing. The acquisition is subject to regulatory approvals, including clearance from the Reserve Bank of India (RBI).
This investment highlights Bain Capital’s continued interest in India’s financial services sector, following previous investments in Axis Bank, L&T Finance, and 360One Wealth. Manappuram Finance’s leadership sees this partnership as an opportunity to scale operations, enhance governance, and drive long-term growth, positioning the company as a leading diversified financial services provider in India.
Acquisition of Manappuram Asset Finance Limited (MAFL)
As part of its expansion strategy, Manappuram Finance has approved the acquisition of a 99.91% stake in MAFL, a non-banking financial company (NBFC) specializing in loans against gold, mortgages, and business financing. With this acquisition, MAFL will become a subsidiary of Manappuram Finance, strengthening its presence in the NBFC sector. The transaction remains subject to regulatory approvals, including clearance from the Reserve Bank of India (RBI).
Increase in Authorized Share Capital & Amendments to AOA
In a move to accommodate future growth, the company’s board has approved an increase in its authorized share capital from ₹200 crore to ₹300 crore, necessitating an amendment to its Memorandum of Association (MOA). Additionally, the Articles of Association (AOA) will be modified to incorporate provisions for warrant issuance, convertible securities, and the updated terms of the Shareholders’ Agreement (SHA) between investors and promoters.
Extraordinary General Meeting (EGM) Scheduled
To finalize these major decisions, an Extraordinary General Meeting (EGM) has been scheduled for April 16, 2025. Shareholders will vote on approving the preferential issue, the proposed increase in share capital, and the corporate governance amendments.
Asirvad Micro Finance Limited Withdraws IPO Plans
In a parallel development, the board of Asirvad Micro Finance Limited (AMFL), a subsidiary of Manappuram Finance, has decided to withdraw its initial public offering (IPO) filing with SEBI. The reasons behind the decision were not disclosed, but it aligns with the company’s broader strategic realignment.
With Bain Capital’s substantial investment and these transformative decisions, Manappuram Finance is positioning itself for aggressive expansion and long-term growth.
