CLSA has maintained an ‘Outperform’ rating on Manappuram Finance and raised its target price to ₹270 per share, citing the transformative potential of the recent ₹43.85 billion investment by Bain Capital. The global private equity firm will initially acquire an 18% stake in the company at ₹236 per share through preferential equity and warrants. This move triggers a mandatory open offer for an additional 26% stake at the same price. Following the transaction, Bain Capital’s holding may rise to 41.7%, resulting in joint control with existing promoters, whose stake will reduce to 28.9%.
According to CLSA, the partnership with Bain is a strong strategic development, especially under a new CEO. The company has laid out a roadmap focused on accelerating its core gold loan segment, expanding its microfinance (MFI), housing finance, and vehicle lending verticals, and significantly upgrading its technology platforms. CLSA believes these changes open up possibilities for a healthy rerating in the stock.
The brokerage notes that Manappuram’s shift from a promoter-led to a jointly controlled structure could instill greater institutional confidence, improve execution, and enhance long-term value. With the current stock price hovering below the ₹236 open offer price, CLSA sees meaningful upside potential.
Manappuram Finance is a leading NBFC in India primarily engaged in gold loans, but also has a presence in microfinance, vehicle finance, and home loans. The Bain Capital deal, valued at over $1 billion, positions it for a fresh strategic overhaul.
