This NBFC stock, which deals in the business of providing a range of fund-based and fee-based services such as gold loans, and money exchange facilities, surged upto 4 percent after Bain Capital to invest ~Rs. 4,385 crore.
Share Price Movement
In Friday’s trading session, Manappuram Finance‘s share price touched a day’s high of Rs. 230 which was up by 5.74 percent. The stock reiterated from the day’s high and was trading at Rs. 226.17 which is 3.99 percent higher than the previous closing price of Rs. 217.50 apiece.
In the past year, the stock has given around 34 percent returns, and compared to the Nifty Index, Manappuram Finance has outperformed.
What happened
Manappuram Finance stock is in focus after partnering with Bain Capital to invest through its affiliates BC Asia Investments XXV Limited and BC Asia Investments XIV Limited with existing promoters who continue to be invested.
This strategic investment is to aid the company’s growth to drive transformation, operational excellence, and strengthen its leadership & expand across key segments. The Bain Capital plans to acquire 18 percent through an investment of ~Rs. 4,385 crores through a diluted basis via preferential allotment of equity & warrants at a share price of Rs. 236 which is a ~30 percent premium over 6 month average trading price.
This transaction will trigger a mandatory open offer for purchase of additional stake of 26 percent for a share price of Rs. 236. Post the investment, Bain Capital can hold stake between 18 to 41.7 percent stake and the existing promoters to hold 28.9 percent stake post investment. This transaction is subjected to customary and regulatory approvals as per company’s recent exchange filing.
Management Commentary
Commenting on the development, the MD & CEO of Manappuram Finance, V.P. Nandakumar said “The journey of Manappuram Finance has been a long and rewarding one, delivering rich dividends to all stakeholders and investors. For me personally, it has been a privilege to lead such a dynamic company that continues to set gold standards in the NBFC sector.
As we embark on the next phase of our growth, we are delighted to welcome Bain Capital as our new partner. Their leadership team is renowned for its commitment to excellence, and their sharp focus on growth will unlock fresh opportunities for Manappuram Finance. We look forward to a successful partnership that drives innovation and sustained success”.
Financials
In its latest filing for the quarter ending December 2024, the company reported a 5.00 percent rise in net interest income, reaching Rs. 1,634.4 crore compared to Rs. 1,556 crore in Q3FY24. During the same period, net profit declined by 51.6 percent from Rs. 575.3 crore in Q3FY24 to Rs. 278.5 crore in Q3FY25.
Business Mix
The company earned 74.03 of its operational revenue under the Gold Loan and Others, and the remaining 25.96 percent from Micro Finance for the December 2024 quarter. In operating profit, the Gold Loan segment contributed the most while Microfinance was in loss for the same quarter.
AUM Size
As of 31st December 2024, the Assets under Management (AUM) stood at Rs. 44,217 crores. The gold segment contributes the highest to the AUM followed by its subsidiary’s Asirvad Microfinance segment.
Overall, 55 percent of its AUM is related to Gold, 21 percent to MFI, 12 percent to VEF, 7 percent of MSME, 4 percent of HFC and the remaining 1 percent is Onlending as on Q3FY25.
Company Profile
Manappuram Finance was founded in 1949 in Valapad, Kerala, and is a leading Indian non-banking financial company (NBFC). Initially focused on gold loans, it has diversified into microfinance, housing, vehicle finance, and SME lending.
Written by – Santhosh S
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