Manappuram Finance has received final approval from the Reserve Bank of India (RBI) for Bain Capital to acquire joint control and up to 41.66% of the company’s equity and convertible instruments. The non-bank lender confirmed the regulatory clearance on Saturday. Manappuram Finance primarily extends loans in which gold is used as collateral, maintaining a loan book of approximately 315 billion rupees focused on gold loans.
The RBI’s approval relates to agreements signed in March, under which Bain Capital committed to invest approximately 43.85 billion Indian rupees (about $484.40 million AUD) for an 18% fully diluted stake. The investment is priced at 236 rupees per share. Bain Capital’s ultimate stake will range between 18% and 41.7%, contingent on the acceptance of an open offer, according to the company.
Following the transaction, the existing promoters of Manappuram Finance will hold 28.9% of the company on a fully diluted basis. The Reserve Bank of India had previously raised concerns regarding the deal last month, given that Bain Capital already possesses a controlling interest in another lending institution within India. Manappuram Finance specialises in gold loans, offering financial services primarily secured by gold assets.
