RBI Approves Bain Capital's Rs 4,385 Cr Deal for Manappuram Finance

RBI Grants Final Approval for Bain Capital's Strategic Investment

The Reserve Bank of India (RBI) has given its final approval for the proposed acquisition of up to a 41.66% stake and joint control in Manappuram Finance Ltd. by affiliates of private equity major Bain Capital. The clearance, communicated on February 13, 2026, concludes a year-long process and paves the way for a significant Rs 4,385 crore investment into the Kerala-based gold loan financier.

In a regulatory filing, Manappuram Finance confirmed that the central bank's approval allows BC Asia Investments XXV Ltd and BC Asia Investments XIV Ltd, both Bain Capital affiliates, to proceed with the transaction. This development marks a pivotal moment for the non-banking financial company (NBFC), securing a strategic partner to fuel its next phase of growth.

The Structure of the Transaction

The deal originated from definitive agreements signed on March 20, 2025. The transaction is structured in two main parts. Initially, Bain Capital will invest approximately Rs 4,385 crore to acquire an 18% stake in Manappuram on a fully diluted basis. This will be executed through a preferential allotment of equity shares and warrants at a price of Rs 236 per share.

This initial acquisition triggers a mandatory open offer under the Securities and Exchange Board of India’s (SEBI) Takeover Regulations. Bain Capital will make an offer to public shareholders to acquire 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 shareholding will range between 18% and 41.7% on a fully diluted basis.

A Shift in Control and Governance

Following the completion of the transaction, Bain Capital will be reclassified as a promoter of Manappuram Finance and will exercise joint control alongside the existing promoters, led by MD and CEO V.P. Nandakumar. The existing promoter group is expected to retain a stake of around 28.9% on a fully diluted basis. As part of the agreement, the company's board will be reconstituted to include nominee directors from Bain Capital, giving the private equity firm a significant say in the company's strategic direction.

Overcoming Regulatory Hurdles

The path to approval was not without challenges. In early January 2026, the deal faced a significant delay after the RBI raised concerns regarding Bain Capital's controlling stake in another Indian lender, Tyger Capital. The regulator flagged the potential for concentration risk if a single investor were to control two separate lending institutions. This news led to market volatility, with Manappuram's shares declining by as much as 10% on January 9, 2026. However, the final approval indicates that these concerns have been satisfactorily addressed, setting a precedent for future private equity investments in India's regulated financial sector.

Key Deal Metrics

Management's Vision for the Future

Commenting on the RBI's clearance, V.P. Nandakumar expressed confidence in the partnership. He stated that Bain Capital's entry as a joint controlling shareholder will help accelerate growth in core segments, strengthen investments in technology and risk management, and support the expansion of its pan-India branch network. The collaboration is seen as a step towards transforming Manappuram into a professionally managed, future-ready financial services company.

Market Position and Stock Performance

Manappuram Finance is a leading player in the financial services sector, with a loan book of approximately Rs 31,500 crore, primarily focused on gold loans. Ahead of the announcement, on Friday, February 13, 2026, shares of Manappuram Finance closed 1.95% lower at Rs 302.65 on the NSE. From a technical perspective, the stock's 14-day Relative Strength Index (RSI) stood at a neutral 52.7. The stock was also trading above seven of its eight simple moving averages, indicating a generally positive underlying trend.

Conclusion and Next Steps

The RBI's final approval removes the last major hurdle for the Rs 4,385 crore investment by Bain Capital into Manappuram Finance. The capital infusion is expected to strengthen the company's balance sheet and support its long-term strategic objectives. The next step in the process will be the launch of the mandatory open offer to public shareholders. This landmark deal underscores the growing interest of global private equity firms in India's robust NBFC sector.