Share price of Manappuram Finance rallied over 13% on the NSE on Friday, a day after global private equity firm Bain Capital announced a ₹4,385-crore investment to acquire an 18% stake and joint control in the company via an open offer.
Shares of the country’s second-largest gold loan NBFC opened at ₹226 on the National Stock Exchange (NSE), up from Thursday’s closing price of ₹217.50. The stock climbed over 13% during the day to hit a fresh 52-week high of ₹247.60, before settling at ₹234.40 — close to Bain Capital’s acquisition price.
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On Thursday, the Kerala-based NBFC said Bain, through its affiliates — BC Asia Investments XXV and BC Asia Investments XIV — will purchase 93 million shares each at an average price of ₹236 apiece, reflecting a 30% premium over the six-month average. The deal triggers a mandatory open offer, with Bain Capital offering to acquire an additional 26% stake at ₹236 per share.
Following the announcement, several brokerages revised their ratings and target prices upwards. Motilal Oswal Financial Services maintained a ‘Neutral’ rating, but raised its target price to ₹240. It noted that the company’s valuations remain attractive, trading at 7x FY27 price-to-earnings after factoring in Bain’s total equity infusion over FY26 and FY27.
“Bain Capital’s joint control will bring strategic guidance and expertise, aiding the company’s next growth phase,” it said.
Post-transaction, Bain Capital’s ownership will range between 18.0% and 41.7% on a fully diluted basis, depending on the response to the open offer. As of December 2024, promoters VP Nandakumar and Sushama Nandakumar held a combined 34.72% stake in Manappuram. Their holding will reduce to 28.9% on a fully diluted basis.
Motilal Oswal termed the onboarding of a strategic investor and the move to joint control as a positive, particularly in light of limited succession planning visibility. “A key next step is appointing a professional CEO for Manappuram, and where needed, for group entities, who can then assemble a strong senior management team,” the firm said.
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Elara Securities called the deal a turning point for India’s second-largest gold loan provider. While anticipating a short-term transition, it upgraded the stock to ‘Accumulate’ from ‘Reduce’ and raised the target price to ₹250 from ₹185.
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