RBI Greenlights Bain Capital's ₹4,385 Crore Stake in Manappuram Finance

Introduction: A Major NBFC Deal Moves Forward

The Reserve Bank of India (RBI) has provided its final approval for affiliates of Bain Capital to acquire a substantial stake and joint control in Manappuram Finance. The approval, communicated on February 13, 2026, clears the path for a significant ₹4,385 crore investment by the global private equity firm into the Kerala-based gold loan non-banking financial company (NBFC). This development marks the culmination of a nearly year-long process that began with the signing of definitive agreements in March 2025 and is poised to reshape the company's ownership structure and strategic direction.

The Landmark Approval Explained

The central bank's clearance is the final regulatory hurdle for the transaction. With this nod, Bain Capital, through its entities BC Asia Investments XXV Limited and BC Asia Investments XIV Limited, will be officially classified as a promoter of Manappuram Finance. The firm will exercise joint control over the company alongside the existing promoter group, led by MD and CEO V.P. Nandakumar. As part of the agreement, the board of Manappuram Finance will be reconstituted to include nominee directors appointed by Bain Capital, ensuring its active participation in the company's governance and strategic planning.

Dissecting the Deal's Structure

The transaction is structured in two primary phases. The first involves a preferential allotment of equity shares and warrants to Bain Capital, allowing it to acquire an initial 18% stake on a fully diluted basis. This initial investment was priced at ₹236 per share, which represented a significant premium at the time of the announcement, signaling strong investor confidence.

This initial acquisition automatically triggered a mandatory open offer under the regulations of the Securities and Exchange Board of India (SEBI). Bain Capital is now required to make an offer to the public shareholders of Manappuram Finance to purchase an additional 26% stake at the same price of ₹236 per share. The final shareholding of Bain Capital will depend on the response to this open offer.

Financial and Ownership Implications

The total investment from Bain Capital is valued at approximately ₹4,385 crore. Following the completion of both the preferential allotment and the open offer, Bain Capital's stake in Manappuram Finance will range between 18% and a potential maximum of 41.7% on a fully diluted basis. This includes shares that will be issued upon the exercise of warrants. Concurrently, the existing promoters' stake is expected to be around 28.9% on a fully diluted basis, ensuring they remain a significant shareholder with joint control.

A Year-Long Regulatory Journey

The path to this final approval involved securing clearances from multiple regulatory bodies. The definitive agreements were first executed on March 20, 2025. Subsequently, the deal received approvals from the Competition Commission of India (CCI), which ensures that such transactions do not harm market competition. SEBI issued its observation letter for the open offer in September 2025, allowing that part of the process to move forward pending the final RBI decision. The RBI's approval was the most critical step, as it governs ownership and control changes within the NBFC sector. The central bank had previously raised concerns about a single investor controlling multiple lending institutions, but these issues appear to have been addressed to the satisfaction of the regulator, leading to the final clearance.

Management's Vision for Future Growth

V.P. Nandakumar, MD and CEO of Manappuram Finance, expressed optimism regarding the partnership. He 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 also highlighted that the strategic alliance would help the company enhance and expand its branch network across India, strengthening its market presence.

Market Impact and Sector Confidence

This landmark deal is a significant vote of confidence in India's NBFC sector, particularly in the gold loan segment. Bain Capital's substantial investment underscores the long-term growth potential it sees in Manappuram Finance and its business model. The capital infusion is expected to provide Manappuram with the necessary resources to fortify its balance sheet, diversify its product offerings, and compete more effectively in a dynamic financial landscape. For the broader market, it signals continued interest from global private equity giants in well-established Indian financial institutions.

Conclusion: Next Steps for the Partnership

With the RBI's final approval in place, the transaction between Bain Capital and Manappuram Finance is set to proceed to its concluding stages. The next key step will be the commencement of the mandatory open offer to public shareholders. Following this, the process of reconstituting the board will begin, formally integrating Bain Capital into the company's top-level management. This strategic partnership is expected to unlock new opportunities for Manappuram Finance, leveraging Bain Capital's global expertise and financial strength to drive the next phase of its growth.