Manappuram Finance shares witnessed a sharp decline of 9.9% in intraday trading, dropping to a low of ₹278.45 from the previous closing price of ₹309.35. The gold loan specialist NBFC, which has a market capitalisation of ₹24,208.03 crores, came under pressure following regulatory concerns over a major investment deal.

RBI Raises Concerns Over Bain Capital Deal

According to Reuters reports citing sources, the Reserve Bank of India has raised objections to Bain Capital's plan to acquire a controlling stake in Manappuram Finance. The regulatory pushback has prompted Bain to explore alternative strategies to address the central bank's concerns.

To address the regulator's concerns, Bain is now exploring a phased divestment of its stake in Tyger Capital. These developments could significantly impact the proposed deal structure, under which Bain was expected to be classified as a joint promoter alongside existing promoters VP Nandakumar and Sushama Nandakumar after the transaction and mandatory open offer.

Financial Performance Overview

The company's recent financial performance shows mixed results across different periods. Revenue declined by 13.28% from ₹2,633.00 crores in September 2024 to ₹2,283.00 crores in September 2025. Net profit also experienced a significant decline from ₹572.00 crores to ₹217.00 crores during the same period.

Despite the revenue challenges, the company demonstrates decent capital efficiency with steady returns generated from both overall capital and shareholders' funds. The healthy dividend payout ratio reflects a balanced approach between rewarding shareholders and retaining earnings for future growth.

Operational Performance in Q2 FY2026

In Q2 FY2026, Manappuram Finance reported steady operational performance with consolidated Assets Under Management (AUM) reaching ₹45,789.00 crores, reflecting a 3.40% quarter-on-quarter growth. Operational efficiency also improved, as the OPEX to NIM ratio declined to 52.50%, marking a 1.40% QoQ reduction, underscoring better cost management and margin optimisation.

The AUM composition for Q2 FY2026 shows a strong emphasis on gold loans, which account for 69% of the total portfolio, highlighting the company's core specialisation in this segment. The diversified portfolio also includes microfinance, vehicle and equipment finance, and MSME lending.

Market Impact and Business Profile

Manappuram Finance operates primarily as a gold loan specialist, being a pioneer NBFC in this space. The company has diversified to offer a broad range of financial services beyond its core gold loan business. The regulatory concerns over the Bain Capital deal have created uncertainty around the company's growth plans and strategic direction, contributing to the sharp decline in share price.

Manappuram Finance shares experienced a significant decline of 10% during intraday trading, reaching a day's low of ₹278.55 following reports of regulatory concerns regarding Bain Capital's proposed investment in the gold loan company.

RBI Raises Regulatory Concerns

According to a Reuters report, the Reserve Bank of India has expressed reservations about Bain Capital's plan to acquire a controlling stake in Manappuram Finance. The central bank's objections reportedly center on Bain's existing controlling interest in another Indian lender, creating potential regulatory conflicts.

The sell-off occurred amid exceptionally high trading volumes, with over 2.5 crore shares changing hands around 3:14 pm, resulting in a total traded value of ₹740 crore.

Deal Structure and Investment Details

The proposed transaction involves a substantial investment by the US private equity firm. Bain Capital announced its investment plans in March, outlining a phased acquisition strategy for the gold loan specialist.

The investment would be executed through two of Bain's funds - BC Asia Investments XXV and BC Asia Investments XIV - making Bain one of two controlling shareholders with rights to influence management decisions.

Existing Investment Complications

Bain's regulatory challenges stem from its current ownership structure in the Indian financial sector. The firm owns 93% of non-bank lender Tyger Capital, formerly known as Adani Capital, after purchasing shares from the Adani family in 2023 through its Bain Capital Special Situations fund.

While Bain has argued that the investments are being made through different funds and teams, sources suggest this argument is unlikely to address the RBI's concerns effectively.

Potential Resolution Strategies

To address the regulatory objections, Bain Capital is reportedly exploring a phased divestment strategy in Tyger Capital. This approach could potentially resolve the RBI's concerns about the firm holding controlling stakes in multiple Indian lending institutions simultaneously.

The exchanges have sought clarification from Manappuram Finance regarding the news reports, though the company's response was pending at the time of reporting. Neither Bain Capital, Manappuram Finance, nor the RBI provided comments on the matter.

Market Context

The development occurs against the backdrop of increased foreign investment activity in India's financial sector. Recent notable transactions include Japan's MUFG announcing a 20% stake acquisition in Shriram Finance for $4.40 billion in December, and Blackstone's agreement to pay approximately $700 million for a 9.9% stake in Federal Bank in October.