Manappuram Finance has been placed under the F&O ban list for March 21, 2025, after its open interest (OI) surpassed 107.59% of the market-wide position limit (MWPL). According to exchange rules, a stock enters the F&O ban when its OI exceeds 95% of MWPL and is only removed once it falls below 80%.
Manappuram Finance has been in the spotlight after the company’s board approved a significant ₹4,384.94 crore preferential issue, with Bain Capital coming on board as a strategic investor. Bain Capital, through its affiliates BC Asia Investments XXV Limited and BC Asia Investments XIV Limited, will acquire an 18% stake in the company via preferential allotment of equity shares and warrants at ₹236 per share, representing a 30% premium over its six-month average trading price.
The investment will also trigger a mandatory open offer for an additional 26% stake, potentially raising Bain Capital’s total holding to 41.7% on a fully diluted basis. Existing promoters will retain 28.9% ownership, and Bain Capital will obtain joint control with rights to appoint key management roles, including the CEO. Two Bain nominees will also join Manappuram Finance’s board.
To accommodate the preferential issue, the company has increased its authorized share capital from ₹200 crore to ₹300 crore and amended its Articles of Association (AOA) to incorporate new provisions for warrants and convertible securities. An Extraordinary General Meeting (EGM) is scheduled for April 16, 2025, where shareholders will vote on these strategic changes.
Additionally, Manappuram Finance will acquire a 99.91% stake in Manappuram Asset Finance Limited (MAFL), making it a subsidiary, with regulatory approvals pending from the Reserve Bank of India (RBI).
Shares of Manappuram Finance were trading 4.13% higher at ₹226.50 on NSE as of 9:15 AM, reflecting strong investor interest following the Bain Capital deal.
Several brokerages have weighed in on the developments:
- CLSA: Maintained an Outperform rating and raised the target price to ₹270, citing potential business acceleration in gold loans, microfinance, and housing finance under the new structure.
- Jefferies: Maintained a Hold rating with a revised target price of ₹235, acknowledging the positive impact of Bain Capital’s investment but highlighting execution risks.
- Morgan Stanley: Maintained an Equal Weight rating with a ₹180 target price, stating that the stock may hover around the open offer price of ₹236 due to execution uncertainties.
- DAM Capital: Retained a Buy rating and raised the target price to ₹255, expecting a valuation re-rating driven by improved investor confidence and strategic execution.
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