Bain Capital Eyes Majority Stake in Manappuram

13 Nov 2024 , 10:57 AM

According to news reports, Bain Capital is negotiating to buy a majority share in Manappuram Finance in order to place a wager on the nation’s gold lending industry. According to them, the founding family of the well-known gold loan provider and non-bank lender with headquarters in Kerala is re-examining their plans to partially or completely depart the business.

As mixed diversification success has exacerbated short-term obstacles, Manappuram and other companies in the sector have been contending with increased regulatory scrutiny and declining valuations.

While talking to ET, talk of divesting was rejected by MD and CEO VP Nandakumar, who controls 35.25% of the business with his family as the promoter group.

According to reports, Bain expressed interest in purchasing a 10–11% share from Nandakumar’s family and supplying the shadow institution with Rs 2,000 crore in primary capital through a preferential allocation.

After that, it will launch a voluntary open offer for a further 25% of the business, which, if fully subscribed for, would increase its economic interest to 45–47% and make it the single largest shareholder.

Bain is eager to manage rights in order to guarantee that the business is operated professionally. According to reports, Bain paid 20–25% more than the going rate. A 47 percent share would cost Rs 6,289.46 crore at the current market value.

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