Manappuram Finance shares jump 4% as Bain Capital to acquire 18% stake at Rs 236 per share; deal may trigger open offer for additional 26% stake

Shares of Manappuram Finance surged over 4% today, March 21, after the company’s board approved a major ₹4,384.94 crore preferential issue, bringing Bain Capital onboard as a strategic investor.

Bain Capital, through its affiliates BC Asia Investments XXV Limited and BC Asia Investments XIV Limited, will invest ₹4,385 crore via preferential allotment of equity shares and warrants priced at ₹236 each. This price represents a premium of around 30% over the stock’s six-month average trading price. Following this investment, Bain Capital will hold an 18% stake in the company, and the transaction will trigger a mandatory open offer for an additional 26% stake at the same price.

Depending on the open offer’s outcome, Bain Capital’s total stake could rise to as much as 41.7% on a fully diluted basis, while the existing promoters will continue to hold 28.9%. The deal is subject to regulatory approvals and customary closing conditions.

As of 9:15 am the shares were trading 4.13% higher at Rs 226.50 on NSE.

This strategic partnership is set to support Manappuram Finance’s next growth phase by enhancing operational strength, broadening leadership, and scaling its financial services offerings in gold loans, SME finance, vehicle lending, and microfinance. Bain Capital will jointly control the company alongside existing promoters and will have rights to appoint key executive roles, including the CEO. Two Bain nominees will also join the company’s board.

To facilitate the preferential issue, the company has approved an increase in authorized share capital from ₹200 crore to ₹300 crore and proposed amendments to its Articles of Association (AOA) to include new terms for warrants and convertible securities. An Extraordinary General Meeting (EGM) is scheduled for April 16, 2025, where shareholders will vote on these strategic changes.

As part of its broader transformation, Manappuram Finance will also acquire a 99.91% stake in Manappuram Asset Finance Limited (MAFL), an NBFC focused on gold, mortgage, and business loans. MAFL will become a subsidiary, subject to regulatory approvals from the RBI.

Meanwhile, the board of Asirvad Micro Finance Limited (AMFL), a subsidiary of Manappuram Finance, has decided to withdraw its IPO filing with SEBI, signaling a shift in the group’s strategic priorities.