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Informist, Thursday, Mar. 20, 2025

--Manappuram Fin board OKs raising INR 43.85 bln via issue of shrs, warrants 

MUMBAI – The promoters of Manappuram Finance Ltd. will sell 18% stake in the company to Bain Capital through preferential allotment of shares and warrants on a fully diluted basis, the lender said in an exchange filing Thursday. Bain Capital will acquire the stake for INR 43.85 billion. The board of Manappuram Finance also approved increase in the authorised share capital of the company to INR 3.00 billion from INR 2.00 billion.

Bain Capital will invest in the non-banking financial company through its affiliates, BC Asia Investments XXV Ltd. and BC Asia Investments XIV Ltd. The sale would trigger the mandatory open offer for an additional 26% stake by Bain Capital in the company. Manappuram Finance's existing promotors will retain 28.9% stake after the dilution, the company said in an investor presentation. Currently, the promoters own 34% stake. The shares will be sold at INR 236 per share, a premium of 30% over the six-month average trading price.

The transaction includes 92.90 million fully paid up equity shares and 92.90 million warrants each carrying a right to subscribe to one equity share at INR 236 per warrant, which may be exercised and converted in one or more tranches in the period commencing from the expiry of four months from the date of allotment of warrants till 18 months from the date of allotment.

The sale of shares is expected to closed by Oct-Dec of the next financial year subject to necessary approvals, the company said. "This strategic investment aims to fuel the company's next phase of growth and drive transformation by enhancing operational excellence, strengthening leadership, and expanding its presence across key segments," Mannapuram Finance said. 

Post the transfer of shares, Bain Capital will be classified as a promoter of the company and will jointly control the company with the existing promoters. Bain Capital will have the right to nominate for appointment certain members of the executive management and other key managerial personnel for Manappuram Finance and group companies.

Bain Capital will also have the right to materially influence the strategic decision making at Manappuram Finance post the transaction. The board will be reconstituted and include two nominee directors of Bain Capital, the investor presentation said.

The board of the company also approved the acquisition of 99.917% of the total issued and subscribed share capital of Manappuram Asset Finance Ltd. The turnover of Manappuram Asset Finance as on Mar. 31, 2024 was INR 851.70 million. In 2022-23 (Apr-Mar) the turnover of the company was INR 632.28 million and it was INR 353.69 million in 2021-22.

Manappuram Finance's consolidated net profit for the December quarter fell nearly 51% on year to INR 2.82 billion, as provisioning for bad loans rose nearly fourfold during the period. On Thursday, shares of the company closed 1.7% higher at INR 217.50 on the National Stock Exchange.  End

Reported by Cassandra Carvalho and Kabir Sharma

Edited by Ashish Shirke

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