One of Kerala’s most profitable companies and leading gold loan provider, Manappuram Finance, is on the brink of a takeover by American private equity major Bain Capital. The deal is in its final stages, and if successfully concluded, Bain Capital will secure a controlling interest in the company, potentially owning up to 46% of its shares. The deal size is estimated to be around Rs 9,000-10,000 crore, according to an Economic Times report.
Manappuram Finance’s Managing Director and CEO VP Nandakumar, along with the promoter group, currently holds a 35.25% stake in the company, valued at approximately Rs 6,000 crore based on Friday’s closing share price.
Bain Capital plans to acquire nearly a quarter of the company through a combination of fresh capital infusion via preferential allotment and stake sale from the promoters. Following this, Bain Capital also plans to launch an open offer for an additional 26% stake, which could bring its total shareholding to 46%.
As per the report, the preferential allotment is expected to be priced at a 12.5-15% premium, while the secondary sale from promoters could be at a premium of 22.5-25% over Friday’s closing price of Rs 200.85. This would result in an estimated blended price of Rs 237-240 per share.
Reports from November 2024 indicated that Manappuram Finance was in discussions with multiple parties for a stake sale, with Bain Capital emerging as the frontrunner. However, negotiations reportedly faced delays due to disagreements over which assets would be included in the transaction. Bain Capital was primarily interested in the gold loan business, which contributes 55% of the company’s total assets under management (AUM).
However, the promoters were unwilling to sell only the gold loan segment, as it would leave them with less profitable businesses such as microfinance, vehicle finance, and housing loans. The microfinance division, Asirvad Micro Finance, had also encountered regulatory hurdles after the Reserve Bank of India (RBI) barred it from sanctioning and disbursing loans in October 2024. This restriction was lifted in January 2025.
With negotiations now back on track, Bain Capital is seeking management control, which includes appointing a new chief executive, while Nandakumar and his family members transition to non-executive roles.
VP Nandakumar inherited the business in 1986 following his father’s passing and transformed the single-office pawn broking and money lending operation in Valapad, Thrissur, into one of the largest NBFCs in India.
Under his leadership, Manappuram Finance has achieved exceptional growth, boasting a consolidated AUM of Rs 44,200 crore, with over 5,000 branches across India, employing more than 50,000 people. In FY24, the company reported a total income of Rs 8,920 crore and a net profit of Rs 2,197 crore, making it the third most profitable listed company from Kerala.
Following media reports of the potential acquisition, shares of Manappuram Finance surged by as much as 4%, but is currently trading at Rs 205.2, up 2.17%. At this price, Manappuram Finance has a market cap of Rs 17,369 crores.
Over the past three months, the stock has gained 35.40%, driven by record-high gold prices, the resolution of regulatory issues at Asirvad Micro Finance and ongoing acquisition discussions.
DhanamOnline reached out to Manappuram Finance for comments, but they declined to provide an official statement at the time of publishing this article.