RBI Approves Bain Capital's ₹4,385 Cr Deal for 41.7% Stake in Manappuram Finance

Introduction

The Reserve Bank of India (RBI) has granted its final approval for affiliates of Bain Capital to acquire up to a 41.66% stake and joint control in Manappuram Finance. The approval, announced on February 13, 2026, marks the conclusion of a year-long regulatory process for the private equity firm's significant ₹4,385 crore investment into the Kerala-based gold loan non-banking financial company (NBFC).

The Deal Structure

The transaction's foundation was laid on March 20, 2025, when Manappuram Finance and Bain Capital executed definitive agreements. The deal involves a strategic investment of approximately ₹4,385 crore. This investment is structured through a preferential allotment of equity shares and warrants to Bain Capital's affiliates, BC Asia Investments XXV Ltd and BC Asia Investments XIV Ltd, at a fixed price of ₹236 per share. This initial step secures Bain Capital an 18% stake on a fully diluted basis.

As per regulations from the Securities and Exchange Board of India (SEBI), this substantial acquisition triggered a mandatory open offer. Bain Capital is now required to make an offer to public shareholders to purchase an additional 26% stake in Manappuram Finance at the same price of ₹236 per share. Depending on the response to the open offer, Bain Capital's total holding in the company will range between 18% and 41.7% on a fully diluted basis.

A Challenging Regulatory Journey

The path to securing final approval was not straightforward. After the deal was announced in March 2025, it faced scrutiny from the RBI. The central bank raised concerns regarding Bain Capital's existing controlling stake in another Indian lender, Tyger Capital (formerly Adani Capital), where it holds approximately 93%. The RBI's objection centered on the principle of preventing a single investor from exercising control over multiple lending institutions, which could create concentration risk and potential conflicts of interest within the financial sector.

This regulatory hurdle led to delays and created uncertainty in the market. In January 2026, reports of the RBI's objections caused Manappuram Finance's shares to fall by as much as 10%. While the deal had already received approvals from SEBI and the Competition Commission of India (CCI), the RBI's clearance was the critical final step. To address the central bank's concerns, Bain Capital was reportedly exploring a phased divestment of its stake in Tyger Capital.

Key Transaction Details

Implications for Manappuram Finance

With the RBI's approval secured, Bain Capital will be officially classified as a promoter of Manappuram Finance and will share joint control with the existing promoters, led by V. P. Nandakumar. This change in ownership structure will lead to a reconstitution of the company's board, which will now include nominee directors appointed by Bain Capital. Post-investment, the existing promoters are expected to hold a stake of approximately 28.9% on a fully diluted basis.

Management's Vision for the Future

V. P. Nandakumar, the MD and CEO of Manappuram Finance, expressed optimism about 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 collaboration would help the company enhance and expand its branch network across India, signaling a new phase of strategic growth.

Conclusion

The final approval from the RBI removes the last major obstacle for Bain Capital's landmark investment in Manappuram Finance. This development provides significant clarity to investors and sets the stage for a new chapter of governance and strategic direction for the gold loan financier. With the backing of a global private equity major, Manappuram Finance is poised to strengthen its market position, upgrade its operational capabilities, and pursue accelerated growth in the competitive Indian financial services landscape.