Bain Capital’s Acquisition Of Joint Control A Healthy Development For Manappuram Finance, Says Motilal Oswal

Following the transaction’s completion, Bain Capital will be classified as a promoter of the company and jointly control Manappuram Finance with existing promoters. Additionally, Bain will have the right to materially influence strategic decision-making, at Manappuram Finance as the Board will be reconstituted to include two nominee directors of Bain Capital. The transaction is expected to close by Q2/Q3 FY26, subject to the receipt of necessary approvals..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Bain Capital will invest ~Rs 43.85 billion in Manappuram Finance Ltd. to acquire ~18% stake on a fully diluted basis through a preferential allotment of equity shares and warrants at Rs 236/share (~30% above the six-month average trading price and ~9% higher than the current market price).The transaction will trigger 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 has been fixed at Rs 236/share.After the completion of this transaction, Bain Capital will acquire ~18%- 41.7% stake in the company on a fully diluted basis, depending on the open offer uptake. Meanwhile, the stake of existing promoters will decline to 28.9% on a fully diluted basis (from ~35.3% held currently).Following the transaction’s completion, Bain Capital will be classified as a promoter of the company and jointly control Manappuram Finance with existing promoters. Additionally, Bain will have the right to materially influence strategic decision-making, at Manappuram Finance as the Board will be reconstituted to include two nominee directors of Bain Capital. The transaction is expected to close by Q2/Q3 FY26, subject to the receipt of necessary approvals..After incorporating the total equity investments by Bain Capital over FY26 (and FY27), Manappuram Finance currently trades at 1x FY27E P/BV and 7x FY27E P/E. While valuations are indeed attractive, what will be important for a re-rating (beyond the open offer price of Rs 236/share) is for investors to gain greater confidence in this strategic transformation attempt at Manappuram Finance. We maintain our Neutral rating on the stock with a target price of Rs 240 (based on 1.1x Mar’27E consolidated book value per share)..Click on the attachment to read the full report:.Manappuram Finance Gets 'Buy' Upgrade From IDBI Capital; Bain Capital Joining As Joint Promoter To Be Positive.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Bain Capital’s Acquisition Of Joint Control A Healthy Development For Manappuram Finance, Says Motilal Oswal

While valuations are indeed attractive, what will be important for a re-rating is for investors to gain greater confidence in this strategic transformation attempt at Manappuram Finance- Motilal Oswal

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