RBI Grants Final Approval for Bain Capital's Rs 4,385 Crore Manappuram 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, resolving earlier regulatory uncertainties that had caused market volatility. This decision marks a pivotal moment for the gold loan financier, enabling a strategic partnership with the global private equity firm.

The Transaction Details

The definitive agreements for the transaction were originally executed on March 20, 2025. The deal is structured in two main parts. First, Bain Capital will invest in an 18% stake on a fully diluted basis through a preferential allotment of equity shares and warrants. The agreed price for this transaction is Rs 236 per share. Following this initial investment, the deal triggers a mandatory open offer for Bain Capital to purchase an additional 26% stake from public shareholders at the same price, as required by SEBI's takeover regulations.

A Period of Regulatory Uncertainty

The journey to this final approval was not without challenges. In early January 2026, reports emerged that the RBI had raised concerns about the transaction. The central bank's objections were rooted in Bain Capital's existing ownership of another Indian non-bank lender, Tyger Capital (formerly Adani Capital), where it holds a reported 93% stake. The RBI's supervisory stance generally discourages a single investor from exercising control over multiple lending institutions to mitigate risks related to conflicts of interest and market concentration. This regulatory scrutiny cast a shadow of uncertainty over the deal's completion.

Market Reaction and Company Clarification

The news of the RBI's concerns had an immediate impact on Manappuram Finance's stock. On January 9, 2026, the company's shares plunged by as much as 10% during intraday trading, eventually closing down approximately 8% amid heavy trading volumes. In response to the market turmoil and media reports, Manappuram Finance issued a clarification to the stock exchanges. The company stated that reports suggesting the deal was "delayed due to Indian regulatory concerns" were "factually incorrect and speculative," assuring investors that the proposal was progressing through the standard regulatory process.

Key Deal Metrics

The transaction between Bain Capital and Manappuram Finance is a multi-layered deal with significant financial implications. The structure ensures Bain can build a substantial controlling stake.

Resolution and Path Forward

To address the RBI's concerns, reports suggested that Bain Capital was exploring a phased divestment of its stake in Tyger Capital. While the specifics of the resolution have not been publicly detailed, the final approval from the RBI indicates that a satisfactory arrangement was reached. With this clearance, Bain Capital will now be classified as a promoter of Manappuram Finance and will share joint control with the existing promoters, led by V.P. Nandakumar. The company's board will be reconstituted to include nominee directors from Bain Capital, aligning with the transaction agreements.

Strategic Implications for Manappuram

V.P. Nandakumar, the MD and CEO of Manappuram Finance, expressed optimism about the partnership. "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 stated. He also highlighted that the collaboration would help enhance and expand the company's branch network across India. The capital infusion and strategic guidance from Bain are expected to strengthen Manappuram's market position.

Conclusion: A New Chapter Begins

The final approval from the RBI concludes a nearly year-long process and removes a significant overhang on Manappuram Finance. The deal underscores the growing interest of global private equity in India's financial services sector, while also highlighting the stringent regulatory environment overseen by the RBI. The next steps will involve the completion of the open offer and the formal reconstitution of the board. For Manappuram Finance, this partnership with Bain Capital marks the beginning of a new strategic chapter aimed at long-term growth and value creation.