The Reserve Bank of India has expressed its reservations, saying that the US firm has a controlling interest in another Indian lender, the report said, citing three people with direct knowledge of the matter.
Meanwhile, the exchanges have sought clarification from Manappuram Finance with respect to the news item, and the gold loan company’s response was awaited at the time of filing the story.
The sell-off was amid high volumes, with over 2.5 crore shares changing hands on the NSE around 3:14 pm. The total traded value of the shares stood at aRs 740 crore.
Bain, which announced its planned investment in the gold loan firm last March, is exploring a phased divestment in Tyger Capital, a smaller firm, to address the RBI’s concerns, the report said, citing one of the sources.
Bain declined to comment, the Reuters report said.
The sources were not authorised to speak to the media and declined to be identified.ETMarkets cannot independently verify the veracity of the story.
Manappuram, which extends loans where gold is used as collateral, did not respond to a request for comment.
The RBI also did not respond to a request for comment, while Tyger declined to comment.
The proposed deal calls for Bain to acquire 18% of Manappuram for around aRs 44 billion ($488 million), after which it would launch an open offer for an additional 26%. That would make Bain one of two controlling shareholders with the right to influence management decisions.
The investments would be made through two of its funds, BC Asia Investments XXV and BC Asia Investments XIV.
Bain owns 93% of non-bank lender Tyger Capital, formerly Adani Capital, after purchasing shares from the Adani family in 2023. That investment is held by the Bain Capital Special Situations fund.
Bain has argued that the investments are being made through different funds and teams, but that argument is unlikely to sway the RBI, according to one of the sources.
Manappuram has a aRs 315 billion loan book, focused on fast-growing gold loans. Tyger has a smaller asset base of aRs 73.2 billion that includes business, farm and home loans.
India’s financial sector saw a rush of foreign investments last year. Japan’s MUFG announced in December that it would take a 20% stake in Shriram Finance for $4.4 billion. Blackstone agreed in October that it would pay around $700 million for a 9.9% stake in India’s Federal Bank.
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