Bain Capital’s planned acquisition of a controlling stake in Indian gold loan provider Manappuram Finance has been delayed after the Reserve Bank of India (RBI) raised regulatory concerns, according to a report by Reuters citing unnamed people familiar with the matter.
The RBI is understood to have objected to the transaction because Bain already holds a controlling interest in another Indian non-bank lender, Tyger Capital, creating potential conflicts under India’s financial sector rules. The central bank has historically opposed investors holding control positions in multiple regulated lenders, whether banks or non-banking financial companies.
Bain announced plans in March last year to acquire an initial 18% stake in Manappuram for approximately INR44bn ($490m), followed by an open offer for a further 26%, which would give the firm joint control and significant influence over management. The investment is being made through two Bain vehicles, BC Asia Investments XXV and BC Asia Investments XIV.
While the deal has already secured approval from India’s market regulator and competition authorities, final clearance rests with the RBI. Shares in Manappuram fell sharply following reports of the regulatory delay, closing down nearly 8%.
Sources said Bain is exploring options to address the regulator’s concerns, including a potential phased divestment of its majority stake in Tyger Capital, formerly Adani Capital, which it acquired in 2023. Bain owns around 93% of Tyger, which operates in business, farm and home loans.In a statement, Bain Capital Special Situations said it has not announced and does not currently plan to sell a controlling stake in Tyger Capital, adding that it remains committed to growing the business alongside its management team.
Manappuram, which focuses on gold-backed lending and has a loan book of around INR315bn ($3.5bn), said it had responded to requests for clarification from the RBI and that regulatory approval for the transaction remains pending. The company described media reports suggesting otherwise as speculative.
Market participants note that the RBI has previously required private equity firms to reduce holdings where ownership thresholds exceeded 20% in multiple regulated lenders. Bain has argued that its investments are held through separate funds and management teams, though sources said this is unlikely to change the regulator’s position.
