CCI okays Bain Capital's proposal to acquire stake in Manappuram Finance

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The Competition Commission of India (CCI) on Tuesday approved Bain Capital's proposed acquisition of a stake in Manappuram Finance.

Bain Capital through its two affiliates -- BC Asia Investments XXV and BC Asia Investments XIV -- will acquire stakes in Manappuram Finance Ltd (MFL).

"The proposed transaction involves four phases, where BC Asia Investments XXV (acquirer 1) will subscribe to 9.29 crore fully paid-up equity shares of MFL through private placement and preferential allotment.

"Further, subscription to 9,29,01,373 warrants of MFL by acquirer 2 (BC Asia Investments XIV), which can be exercised (in one or more tranches) at any point between 4 to 18 months from their date of allotment, each carrying a right to subscribe to 1 equity share of MFL," the regulator said in a release.

BC Asia Investments XXV and its persons acting in concert are also offering to purchase up to 24.42 crore fully paid-up equity shares through an open offer, representing 26 per cent of the expanded voting share capital from public shareholders of MFL, as per the release.

Thereafter, the transaction will trigger a mandatory open offer under the Sebi's SAST (Substantial Acquisition of Shares and Takeovers) rules.

Additionally, the competition watchdog also granted its approval for the acquisition of Manappuram Asset Finance Ltd (MAFL) by Manappuram Finance.

"CCI approves proposed combination involving acquisition in Manappuram Finance Ltd and Manappuram Asset Finance Ltd by Bain Capital," the competition watchdog said in a post on X.

MFL primarily provides gold loans, vehicle loans, and MSME loans. MAFL is mainly engaged in providing gold loans.

In March this year, Bain Capital announced that it entered into definitive agreements to acquire joint control in MFL through its affiliates, BC Asia Investments XXV and BC Asia Investments XIV, in partnership with the existing promoters.

As part of the agreement, Bain Capital will invest Rs 4,385 crore to acquire an 18 per cent stake in MFL on a fully diluted basis via preferential allotment of equity and warrants.

The deals beyond a certain threshold require approval from the regulator, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.