Why did Manappuram Finance shares fall?

Manappuram Finance shares fell significantly due to a Reuters report stating the RBI objected to Bain Capital's planned controlling stake acquisition.

What is Bain Capital's plan for Manappuram Finance?

Bain Capital planned to acquire an 18% stake in Manappuram Finance and subsequently launch an open offer for an additional 26% to gain controlling interest.

What are the RBI's concerns about Bain Capital's investment?

The RBI's concerns stem from Bain Capital already holding a controlling interest in another Indian lender, raising potential regulatory conflicts.

Home / Business and Economy / RBI Halts Bain Capital's Manappuram Takeover Bid

RBI Halts Bain Capital's Manappuram Takeover Bid

9 Jan

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Summary

RBI objects to Bain Capital's controlling stake in Manappuram Finance.
Manappuram Finance shares plunged 10% amid high trading volumes.
Bain Capital seeks to address RBI concerns by divesting another firm.

RBI Halts Bain Capital's Manappuram Takeover Bid

Manappuram Finance experienced a sharp 10% drop in its share price, reaching a low of ₹278.55, following a Reuters report detailing the Reserve Bank of India's objections to Bain Capital's proposed acquisition of a controlling stake. The RBI has expressed reservations, citing Bain's existing controlling interest in another Indian lender, according to sources familiar with the matter.

Bain Capital, which announced its investment plan last March to acquire an 18% stake for approximately ₹44 billion, followed by an open offer for an additional 26%, is now reportedly seeking to resolve these concerns. The US firm is exploring a phased divestment from Tyger Capital, a smaller firm it acquired a significant stake in during 2023.

The significant sell-off was accompanied by high trading volumes on the stock exchange, with over 2.5 crore shares changing hands. Both Manappuram Finance and the RBI have not yet responded to requests for comment regarding the developing situation.