DAM Capital has reiterated its ‘Buy’ rating on Manappuram Finance and raised the target price to ₹255 per share following the announcement of Bain Capital’s ₹4,385 crore investment in the company. The deal, structured via preferential equity and warrant allotments at ₹236 per share, grants Bain an initial 18% stake and triggers a mandatory open offer for an additional 26%. If fully accepted, Bain could hold up to 41.7% in Manappuram Finance, thereby gaining joint control alongside the existing promoter group, whose stake will reduce to 28.9% post-transaction.
DAM Capital views this strategic investment as a game-changer for the company’s execution capabilities and governance standards. The firm believes Bain’s involvement addresses prior investor concerns around scalability, leadership transition, and strategic clarity. With a strong institutional partner onboard, the focus is now expected to shift toward faster scaling of high-growth verticals such as microfinance, vehicle finance, and housing loans, while continuing to dominate the gold loan space.
The brokerage notes that the current valuation of 1.05x FY27E book value is still undemanding given the potential upside from the new partnership. DAM Capital expects the stock to re-rate towards 1.25x FY27E book, underpinning the revised target price. The firm sees this as a reasonable base-case assumption, especially given the strong capital infusion, upcoming warrant allotments (expected over 4–18 months), and improvement in business momentum under new leadership.
Manappuram Finance is a diversified NBFC with a strong legacy in gold lending and a growing presence in other retail segments. The company’s strategy to become a full-fledged retail lender is likely to be accelerated by this deal, with Bain bringing both capital and expertise to the table. While short-term market moves may be tied to the open offer pricing, DAM Capital believes the medium- to long-term story now looks much more compelling.
