New Delhi, May 11 -- Bulge-bracket global private equity firm Bain Capital, which is close to completing fundraising process for its new Asian investment vehicle, has significantly pared down the stake it was looking to acquire in a deal that could have been its largest yet in India, even surpassing it's billion-dollar transaction in Axis Bank nine years ago.
The PE firm that had agreed to invest as much as Rs 10,500 crore (around $1.1 billion) in gold-loan financier Manappuram Finance saw its open offer for the public listed company fail without garnering any shares.
This has restricted its stake in the company to around 18%, on a fully diluted equity basis, after factoring in convertible securities.
In March 2025, Bain had agreed to acquire joint control of Manappuram Finance Ltd, a Kerala-based non-banking financial company and India's second-largest gold financier, in a deal worth more than $500 million.
The PE firm had said it will invest Rs 4,385 crore ($508 million then) to acquire an 18% stake in Manappuram via a preferential allotment of equity shares and warrants at a price of Rs 236 apiece. This was at a premium of about 30% over the six-month average trading price.
The transaction had triggered a mandatory open offer for the purchase of an additional 26% stake in the company on an expanded capital basis (excluding warrants). The open offer price had been fixed at Rs 236 per share.
Based on the open offer subscription, Bain Capital's stake could have been as much as 41.7% had it managed to find takers in the tender offer, on a fully diluted basis. The open offer a few weeks ago that was worth as much as Rs 6,064 crore ($645 million) failed to attract any sellers.
Notably, the Manappuram's share price had shot up over 45% early this year in the wake of the upcoming open offer and even though the premium had shrunk in line with the market correction in the recent past, it has bounced back, making the open offer price redundant.
Manappuram existing promoters will continue to stay fully invested in the lender. They will hold a 28.9% stake in the company on a fully diluted basis.
Meanwhile, Bain has the right to "materially influence" the strategic decision making at Manappuram after the transaction.
The private equity firm has invested in over 1,150 companies globally over the last 41 years, across various sectors. In India, the firm has invested in Axis Bank, L&T Finance, and 360 One Wealth & Asset Management, among others.
Axis Bank was its single biggest transaction in India even as it had previously participated in several transactions worth $500-1,000 million including of names such as Genpact and Hero Motocorp.
The PE firm had previously seen a couple of modest exits in 2024 where it logged out of the country's third-largest private-sector lender, Axis Bank, and wrapped up its journey with L&T Finance Holdings but has logged blockbuster returns from another portfolio in the BFSI sector when it hit the sell button on 360 One WAM Ltd (previously IIFL Wealth Management).
Manappuram Finance was established in 1949 in Valapad, Kerala. While the non-bank lender started as a pure-play gold finance company, it has evolved into a diversified financial services company, extending vehicle finance, home loans, microfinance, and lending to small and medium-sized enterprises.
Published by HT Digital Content Services with permission from VC Circle.