Bain Capital to invest Rs 4,835 crore in Manappuram Finance for 18% stake

The US-based private equity (PE) giant Bain Capital announced on Thursday that it has entered into a definitive agreement to acquire joint control of India’s second-largest gold financier, Manappuram Finance, by purchasing an 18 per cent stake for ₹4,385 crore.

 

The acquisition will be through a preferential allotment of equity and warrants at ₹236 per share, a 30 per cent premium over the six-month average trading price. The deal will trigger a mandatory open offer to purchase an additional 26 per cent stake in the company. The promoter family, led by V P Nandakumar, will hold a 28.9 per cent stake after the deal.

 

The open offer price has been fixed at ₹236 per share. Depending on the open offer subscription, Bain Capital’s post-investment stake will range between 18 per cent and 41.7 per cent on a fully diluted basis (including shares issued upon the exercise of warrants).

 

The deal will be executed through Bain Capital affiliates — BC Asia Investments XXV and BC Asia Investments XIV (Bain Capital) — in partnership with the existing promoters, who will remain fully invested. This strategic investment aims to fuel the company’s next phase of growth and drive transformation by enhancing operational efficiency, strengthening leadership, and expanding its presence across key segments.

 

“This collaboration leverages our deep expertise and commitment to sustainably expanding India’s financial services sector while democratizing access to financial products that foster entrepreneurship and wealth creation across the country,” said Pavninder Singh, partner at Bain Capital. 

 

Bain Capital will be classified as a promoter after investment and will jointly control the company with the existing promoters.  “As we embark on the next phase of our growth, we are delighted to welcome Bain Capital as our new partner. Their leadership team is renowned for its commitment to excellence, and their sharp focus on growth will unlock fresh opportunities for Manappuram Finance. We look forward to a successful partnership that drives innovation and sustained success,” said Nandakumar, managing director and chief executive officer of Manappuram Finance.  The board will be reconstituted as part of the deal, and Nandakumar will continue to guide the team in his role as “non-executive chairman & mentor”.

 

Talks between Manappuram Finance and the PE major began in November 2024. Founded in 1949, Manappuram Finance is a leading non-banking financial institution serving over 6.59 million customers through an extensive network of 5,357 branches and a workforce of 50,795 employees.

 

Bain Capital was advised by Kotak Investment Banking, Boston Consulting Group India, Cyril Amarchand Mangaldas, Ernst & Young LLP, Kirkland & Ellis, and Unaprime Investment Advisors. Manappuram Finance, its affiliates, and existing promoters were advised by Spark Capital and Khaitan & Co.

 

Bain Capital has extensive experience investing in and supporting the growth and leadership of financial services businesses in India and globally, including Axis Bank, 360One Wealth & Asset Management, L&T Finance Holdings, Lionbridge Capital, and esure, among others.

 

“There remains a huge opportunity for the company to accelerate growth in its core segments. We are partnering the family to provide capital for growth and help the company on a professionalisation journey that will enhance operational efficiency and risk management," said Rishi Mandawat, partner at Bain Capital.