BOSTON (Diya TV) — US private equity group Bain Capital is close to making a major investment in Manappuram Finance, a prominent gold loan financier from Kerala, India, for around $1 billion. The strategic investment will give Bain Capital as much as a 46% stake in the firm, marking a major change in its ownership pattern.
At present, V.P. Nandakumar, CEO and Managing Director of Manappuram Finance, and his promoter group have a shareholding of 35.25% in the company. The deal contemplated is the acquisition of almost 25% of the company by Bain Capital through a mix of fresh capital injection in the form of preferential allotment and secondary share purchase from the promoters.
Thereafter, Bain intends to launch an open offer for an additional 26% holding, which could take its overall shareholding to 46%. Talks, which were initiated in 2024, were delayed owing to differences in the structure of the deal. Bain Capital was especially interested in Manappuram’s gold loan business, which accounts for 55% of its assets under management.
The promoters were, however, unwilling to offload just this division, since it would leave them with less lucrative segments like microfinance, vehicle finance, and housing loans. The Reserve Bank of India had put restrictions in place on Manappuram’s microfinance arm, Asirvad Micro Finance, in October last year, preventing it from bringing on new borrowers.
It removed the restrictions in January, possibly accelerating the ongoing talks between Manappuram Finance and Bain Capital. In the expected deal, V.P. Nandakumar and his relatives can move into non-executive positions in the firm. Nandakumar, who took over in 1986 after his father’s death, turned the business from a small pawnbroking and money-lending firm in Thrissur, Kerala, into one of India’s largest non-banking finance companies.
