The RBI has raised objections to US private equity firm Bain Capital’s proposed acquisition of a controlling stake in Manappuram Finance, complicating a deal valued at about $488 million. The objection comes because Bain already holds a controlling interest in another Indian non-bank lender, Tyger Capital, a situation the Reserve Bank generally frowns upon for governance and risk reasons.
Under the proposed transaction, Bain would initially acquire an 18 percent stake in Manappuram Finance for around ₹4400 crore, and then make an open offer for a further 26 percent, giving it significant influence over management. The investment is to be made through two Bain funds—BC Asia Investments XXV and BC Asia Investments XIV.
Although the deal has cleared market and competition regulators in India, RBI clearance is essential for large stake acquisitions in banks and non-bank financial companies (NBFCs). According to sources, Bain is exploring a phased divestment of its Tyger Capital holdings to satisfy the regulator.
Manappuram Finance is one of India’s largest gold-loan NBFCs with a loan book of roughly ₹315 billion.
Manappuram Finance’s shares declined sharply on Friday following the news. The stock dropped about 7 percent to around ₹287 on the BSE, underperforming the broader market as investor concern grew over the regulatory uncertainty.
At one point during the session the share hit an intraday low near ₹278, reflecting sustained selling pressure amid heightened volatility.
The RBI typically discourages investors from controlling multiple lenders—whether banks or NBFCs—due to potential risks around concentration of influence and governance. In the past, private equity firms holding 20 percent or more in multiple NBFCs have been asked to divest to comply with RBI policy. Bain owns about 93 percent of Tyger Capital, formerly Adani Capital, intensifying regulatory scrutiny.
Bain has argued its investments sit in separate funds and are managed by different teams, but that position may not be sufficient for RBI’s risk framework, according to people familiar with the discussions.
