Gold loan non-banking financial company Manappuram Finance said on Saturday that Bain Capital has received the final nod from the Reserve Bank of India (RBI) to acquire a joint control in it. US-based Bain Capital is an investment firm.
According to the proposal, Bain Capital affiliates BC Asia Investments XXV Ltd and BC Asia Investments XIV Ltd will acquire a stake of up to 41.66 per cent in Manappuram Finance. The acquisition will be through paid-up equity capital or convertible instruments, according to Manappuram Finance. The RBI approval, communicated on February 13, is in connection with the definitive agreements executed on March 20 last year under which Bain Capital committed to invest approximately Rs 4,385 crore to acquire an 18.0 per cent stake on a fully diluted basis through preferential allotment of equity shares and warrants at a price of Rs 236 per share. ALSO READ | Valentine’s Day Stocks: Anil Singhvi links BSE, L&T, Zomato and other shares with Gen-Z dating lingo – Full list The transaction triggers a mandatory open offer for the purchase of an additional 26.0 per cent stake from public shareholders at Rs 236 per share, in accordance with capital market regulator SEBI’s rules. Based on the open offer subscription, Bain Capital’s stake after the investment will vary between 18.0 per cent and 41.7 per cent on a fully diluted basis (including shares to be issued pursuant to exercise of warrants). The existing promoters will hold 28.9 per cent post-investment on a fully diluted basis. With this nod in place, Bain Capital will be classified as a promoter of Manappuram Finance. It will jointly control the gold loan NBFC along with the existing promoters. ALSO READ | HUL-Kwality Walls Demerger Big Update: FMCG Major’s ice cream unit shares to list on NSE, BSE – Check date A board will be reconstituted for the company that will include Bain Capital nominee directors, in line with the transaction agreements, Manappuram Finance noted. “We are pleased to receive the Reserve Bank of India’s approval for the proposed investment by Bain Capital. This is an important milestone in our partnership and reflects the strength of our governance framework and business model,” said Manappuram Finance MD and CEO VP Nandakumar. “With Bain Capital coming on board as a joint controlling shareholder, we are well-positioned to accelerate growth in our core segments, invest further in technology and risk management capabilities, and build a professionally managed, future-ready financial services company,” he said. ALSO READ | Zee Business Budget ‘Samvad’ @ BSE: D-Street veterans discuss market, MF and more with Anil Singhvi Nandakumar also said that this will also help the company enhance and expand its branch network across the country. “We remain committed to creating long-term value for our customers, employees, and shareholders,” he said. Manappuram Finance specialises in finance against gold ornaments. Established in 1992 by Nandakumar, the company is headquartered in Valapad in the Thrissur district of Kerala. Manappuram Finance went public in August 1995 and is listed on stock exchange BSE. ALSO READ | Gold ETF or Silver ETF? Which precious metal exchange-traded funds are worth investing in now – Expert answers Here are answers to a few frequently asked questions about this story: What is the latest development in the Manappuram Finance-Bain Capital deal? The RBI has given its final nod to Bain Capital to acquire joint control in Manappuram Finance. What is Bain Capital? What does it do? It is a US-based global investment firm. It invests across private equity, credit and other asset classes. What is Manappuram Finance and what does it do? It is a gold loan non-banking financial company that provides loans against pledged gold ornaments. How much stake can Bain Capital acquire? Bain Capital affiliates may acquire up to 41.66 per cent in Manappuram Finance. How much is Bain Capital investing? Bain Capital committed to invest approximately Rs 4,385 crore to acquire an 18.0 per cent stake through preferential allotment at Rs 236 per share. How will the investment be made? The acquisition will be through paid-up equity capital or convertible instruments.
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