Manappuram shares plunge up to 10% today, here's why

Shares of Manappuram Finance Ltd. fell as much as 10% on Friday after a report said the Reserve Bank of India (RBI) has raised objections to Bain Capital's plans to acquire a controlling stake in the company. The downturn followed the announcement made in March regarding Bain Capital Asia's intended investment of Rs 4,385 crore to secure an 18% stake in the company through a preferential allotment of equity shares and warrants. Bain Capital, through BC Asia Investments, was set to become a joint promoter alongside the current promoters VP Nandakumar and Sushama Nandakumar upon completion of the deal and the open offer.

Manappuram Finance shares slipped 10% intra day to Rs 278.45 against the previous close of Rs 309.35 on BSE. Market cap of the firm slipped to Rs 24,910 crore. Later, the stock closed 4.87% lower at Rs 294.30. 

According to the reported terms, Bain Capital would acquire 9.29 crore equity shares at ₹236 per share via its investment arm, BC Asia Investments XXV Limited. An equivalent number of warrants, each convertible to one equity share at the same price, would be issued to BC Asia Investments XIV Limited. 

The Reuters report goes on to state that Bain is exploring a phased divestment in India's Tyger Capital to address concerns on the Manappuram deal. Main industry competitors for Manappuram Finance include other non-banking financial companies operating in the gold loan and retail finance segment.

The outcome of regulatory discussions may have implications for the broader market and stakeholders, including a potential impact on future investment flows and corporate governance practices. Further updates are expected as the situation develops, pending additional disclosures or regulatory responses.