Manappuram Finance Gets RBI Nod for Bain Capital's Rs 4,385 Crore Deal

Introduction

Manappuram Finance announced on Saturday that it has received the final approval from the Reserve Bank of India (RBI) for Bain Capital's proposed acquisition of a significant stake in the company. The approval, communicated on February 13, 2026, clears the path for an investment of approximately Rs 4,385 crore by the global private equity firm. This transaction will establish Bain Capital as a joint promoter and co-controller of the gold loan financier, marking a pivotal moment for the company's future growth and strategic direction.

The Deal Structure Explained

The agreement, originally executed on March 20, 2025, involves Bain Capital acquiring up to an 18% stake in Manappuram on a fully diluted basis. This will be accomplished through a preferential allotment of equity shares and warrants at a price of Rs 236 per share. The investment is being routed through two Bain Capital affiliates: BC Asia Investments XXV Ltd and BC Asia Investments XIV Ltd.

Furthermore, the transaction triggers a mandatory open offer under SEBI regulations. Bain Capital will make an offer to public shareholders to purchase an additional 26% stake in the company at the same price of Rs 236 per share. Depending on the subscription level of the open offer, Bain Capital's total holding in Manappuram Finance will range between 18% and 41.7% on a fully diluted basis. Following the investment, the existing promoters will hold a 28.9% stake.

A Tumultuous Journey to Approval

The journey to this final approval was not without challenges. In early January 2026, reports emerged that the RBI had raised objections to the deal. The central bank's primary concern stemmed from Bain Capital's existing controlling interest in another Indian non-banking financial company (NBFC), Tyger Capital (formerly Adani Capital), where it holds a 93% stake. The RBI's regulatory framework generally discourages a single investor from exercising control over multiple lending institutions to prevent concentration risk and potential conflicts of interest.

This regulatory scrutiny cast a shadow of uncertainty over the transaction, which had already received approvals from the Securities and Exchange Board of India (SEBI) and the Competition Commission of India (CCI).

Market Reacts to Regulatory Uncertainty

The news of the RBI's potential objections had an immediate and significant impact on Manappuram Finance's stock. On January 9, 2026, the company's shares plummeted by as much as 10%, falling to an intraday low of Rs 278.45 from a previous close of Rs 309.35 on the BSE. The market capitalization of the firm saw a notable decline as investors reacted to the perceived risk of the deal falling through. The stock eventually closed the day with a loss of 4.87% at Rs 294.30, reflecting the high stakes involved.

Manappuram's Stance and Bain's Strategy

In response to the media reports, Manappuram Finance issued a clarification on January 9, denying that the deal was delayed and terming the news speculative. The company stated that it had already received RBI approvals for changes in management at the parent company and its subsidiaries, Asirvad Micro Finance and Manappuram Home Finance. It confirmed that the application for the change of control was still under review and that all necessary filings had been made.

Meanwhile, sources indicated that to address the RBI's concerns, Bain Capital was exploring a phased divestment of its stake in Tyger Capital. This strategic move was seen as a potential solution to navigate the regulatory hurdle regarding control over multiple lenders.

Key Financial Details of the Transaction

Implications for Manappuram Finance

The successful conclusion of this deal is expected to provide a significant boost to Manappuram Finance. V.P. Nandakumar, the company's MD and CEO, stated, "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 added that the partnership would also help enhance and expand the company's branch network across India.

Conclusion and Path Forward

With the final regulatory hurdle now cleared, Manappuram Finance and Bain Capital can proceed with the transaction. The next steps will include the reconstitution of the company's board to include nominee directors from Bain Capital, in line with the transaction agreements. The successful completion of the deal underscores the growing interest of global private equity in India's robust financial services sector, even amidst a tightening supervisory environment. The resolution also highlights the importance of proactive engagement with regulators to structure complex deals in the Indian market.