MUMBAI: The Reserve Bank has granted final approval for Bain Capital to acquire up to a 41.7% stake in Manappuram Finance for Rs 4,385 crore, which will also give the private equity major joint control of the second largest pure-play gold loan player.
The investment will be through a mix of paid-up equity capital and convertible instruments by Bain Capital.
Last March, Bain Capital, through its affiliates BC Asia Investments XXV and BC Asia Investments XIV, had committed to invest about Rs 4,385 crore to acquire an 18% stake at Rs 236 per share in the Thrissur-based company promoted by VP Padmakumar. Since then, the application has been pending with the central bank.
The transaction would also trigger a mandatory open offer to purchase an additional 26% stake from public shareholders at Rs 236 a share.
Bain’s stake post-investment will range between 18% and 41.7% on a fully diluted basis, including shares to be issued upon exercise of warrants.
The existing promoters led by Nandakumar and his family will hold 28.9% post-investment on a fully diluted basis.
The company also has an MFI business based in Chennai under the brand name of Asirvad MFI.
“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,” said Nandakumar, promoter and chief executive of Manappuram Finance, in a statement late Saturday.
Bain Capital will be classified as a promoter of Manappuram and will jointly control the gold loan company along with the existing promoters. The board will be reconstituted to include nominee directors of Bain, in line with the transaction agreements, the company added.