Bain's Manappuram deal delayed by Indian regulators

India's central bank has raised objections to Bain Capital's planned controlling stake in Manappuram Finance, and Bain is exploring a phased divestment in Tyger Capital to address the regulator's concerns.

India's central bank has raised objections to Bain Capital's plan to acquire a controlling stake in Manappuram Finance. The concern relates to Bain's existing controlling interest in another non-bank lender. Bain announced the Manappuram investment last March and received approval from India's market regulator and the competition commission. The Reserve Bank of India (RBI) is the final authority for clearance of large stake purchases in banks and non-bank lenders. Key facts: - The RBI objects to investors controlling multiple lenders, and private equity firms holding 20% or more in non-bank lenders have previously been asked to divest. - The proposed deal calls for Bain to acquire 18% of Manappuram for about 44 billion rupees, followed by an open offer for an additional 26%. - Bain owns 93% of non-bank lender Tyger Capital (formerly Adani Capital), an investment held by Bain Capital's Special Situations fund. - Manappuram's loan book is reported at about 315 billion rupees and is focused on gold loans, while Tyger's asset base is reported at about 73.2 billion rupees. - Bain plans to make the Manappuram investments through BC Asia Investments XXV and BC Asia Investments XIV, and has argued the funds and teams are separate. Summary: RBI objections have delayed completion of Bain's planned acquisition despite earlier approvals from other regulators. Bain is exploring a phased divestment in Tyger Capital to address the central bank's concerns. Undetermined at this time.