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  5. Manappuram Finance shares surge 4% on reports of Bain Capital nearing deal talks

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Manappuram Finance shares surge 4% on reports of Bain Capital nearing deal talks

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By Upstox News Desk

3 min read | Updated on February 24, 2025, 11:22 IST

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SUMMARY

At 9:40 AM, Manappuram shares were trading at ₹207.32 per share, gaining 2.98% on the National Stock Exchange. The company shares closed 1.09% higher at ₹203.51 apiece on NSE

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MANAPPURAM
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The report also stated that although the company may initially be run jointly, Bain is looking for affirmative rights, which will give it management control.

The report also stated that although the company may initially be run jointly, Bain is looking for affirmative rights, which will give it management control.

Shares of Manappuram Finance jumped nearly 4% on Monday, February 24, amid reports of talks between the company and American private equity major Bain Capital reaching the final stage.
According to an Economic Times report, Bain is expected to acquire a significant portion of the promoter stake in India’s second-largest gold loan provider. The agreement being worked on includes Bain Capital infusing fresh capital via a preferential allotment, as well as a secondary sale of shares by the promoters.

At 9:40 AM, Manappuram shares were trading at ₹207.32 per share, gaining 2.98% on the National Stock Exchange. On BSE, shares surged 3.21% to ₹207.3 per share. The company shares closed 1.09% higher at ₹203.51 apiece on NSE.

While the preferential allotment is expected to be at a premium of around 12.5-15% to the current market price, the secondary share sale will be priced higher, at 22.5–25% over Friday’s (February 21) closing price, the sources said. The blended price is expected to be ₹237-240 a share, the ET report said.
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The transactions, which will result in Bain acquiring a quarter of the company, will be followed by a voluntary open offer for another 26% stake due to the change of control, at a price similar to the secondary share sale, the sources told Economic Times. If the open offer is fully subscribed, Bain could end up owning up to 46% of the expanded equity capital base, paying as much as ₹9,000-10,000 crore, it further added.

The report also stated that although the company may initially be run jointly, Bain is looking for affirmative rights, which will give it management control. The Boston-headquartered fund will also bring in a new CEO, as Nandakumar and his family members take up non-executive roles in the company.

Manappuram’s consolidated net profit declined 51.3% to ₹278.46 crore in the third quarter of the financial year 2024-2025 as against ₹525.07 crore in Q3FY24.

However, the company’s total revenue from operations grew marginally by 2.8% to ₹2,559.72 crore as compared to ₹2,633.1 crore in the corresponding quarter last fiscal year. The company’s net interest income also surged 5%.

Also read: Ujjivan Small Fin Bank shares fall nearly 2% as board offloads bad loans worth ₹365 crore; check full details

Bad loans and provisions in Manappuram's microfinance unit rose fourfold to ₹473 crore, accounting for a large chunk of total company-wide provisions of ₹555 crore in the December quarter.

However, Manappuram's revenue from its gold loan portfolio rose 17%, aided by gold prices jumping to record highs.

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