Bain Capital to invest $508 million in Manappuram Finance

US private investment firm Bain Capital has announced an investment of $508 million for an 18% stake in Kerala-based non-bank lender Manappuram Finance Ltd, which is also India’s second-largest gold financier.

The investment will help drive Manappuram’s expansion, building on Bain’s deep financial services experience in India and Manappuram Finance’s 75-year track record of excellence, a company statement said.

The investment will be made via Bain Capital’s affiliates, BC Asia Investments XXV Ltd and BC Asia Investments XIV Ltd, in partnership with existing promoters, who will continue to stay fully invested.

The investment will be made through a preferential allotment of equity shares and warrants at ₹236 per share, which is about 30% higher than the average trading price over the past six months.

As part of the transaction, Bain Capital will also make an open offer to buy an additional 26% stake from other shareholders at the same price of ₹236 per share.

Depending on the number of shares acquired through this open offer, Bain Capital’s total stake in the company could range from 18% to 41.7% after the transaction.

Manappuram Finance’s current promoters will retain a 28.9% stake in the company.

The transaction is subject to standard regulatory approvals and closing conditions.

Established in 1949, Manappuram Finance serves over 6.59 million customers through an extensive network of 5,357 branches and a workforce of 50,795 employees.

Manappuram Finance chief executive V.P. Nandakumar said, “As we embark on the next phase of our growth, we are delighted to welcome Bain Capital as our new partner.”

“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,” Ravinder Singh, partner at Bain Capital, said.

“Manappuram Finance is a leader in the non-banking financial sector, with deep expertise and a strong market presence. Its commitment to customer-centricity and technology-driven innovation has been key to its success,” Rishi Mandawat, partner at Bain Capital, said.

Bain has invested in financial services businesses in India and globally, including Axis Bank, 360One Wealth and Asset Management, L&T Finance Holdings, Lionbridge Capital, and Ensure.

Kotak Investment Banking, Boston Consulting Group India, Cyril Amarchand Mangaldas, EY, Kirkland & Ellis LLP, and Unaprime were Bain’s advisors, while Spark Capital and Khaitan & Co advised Manappuram.