Shares of Manappuram Finance Limited witnessed a sharp recovery during Monday's trading session on January 12, climbing 4.5% to reach an intraday high of ₹298.70. This rebound came after the prominent gold loan financier issued a strong clarification refuting recent media reports which suggested that the Reserve Bank of India (RBI) had delayed its proposed deal with global investment firm Bain Capital.
Clarification on Regulatory Approval
The stock had faced significant selling pressure on Friday, plunging nearly 8%, following a Reuters news agency report. That report, citing unnamed sources, indicated that the RBI had raised objections to Bain Capital's plans to acquire a controlling stake in Manappuram Finance. In response to this volatility, the stock exchanges sought an official clarification from the company on January 9.
On the same day, Manappuram Finance responded firmly to the exchanges. In its regulatory filing, the company categorically denied the media report, labeling it as "factually incorrect and speculative in nature." The company emphasized that it has been providing regular updates to the market regarding the proposed investment by BC Asia Investments XIV Limited and BC Asia Investments XXV Limited (entities related to Bain Capital). This includes updates on the acquisition of joint control in Manappuram and its key subsidiaries, Asirvad Micro Finance Limited and Manappuram Home Finance Limited.
Status of the Bain Capital Transaction
The company's filing provided crucial details on the current status of the regulatory process. It confirmed that it has filed the necessary application for a change of control with the RBI in relation to the proposed transaction with Bain Capital. Manappuram stated that all required filings, including responses to clarifications sought by the central bank, have been submitted. The final approval from the RBI for the proposed transaction is currently pending.
"We will keep the stock exchanges duly updated in this regard," the company assured in its January 9 filing, aiming to bring transparency and quell market speculation.
Broader Context and Sector Outlook
Beyond these company-specific developments, the performance of Manappuram Finance shares is also influenced by the volatility in gold prices. The stock is down 4.5% for the month of January so far. This comes after a stellar performance in 2025, where the shares rallied 65%, riding on a record-breaking rally in gold prices and marking its third consecutive year of positive returns.
Commenting on the sector's dynamics, Harshal Dasani, Business Head at INVasset PMS, noted that the extended upside in gold over the past year significantly boosted collateral values and loan growth for gold-focused lenders like Manappuram. He highlighted that demand for gold loans remains robust, asset quality is stable, and balance sheets are strong due to conservative loan-to-value norms. The elevated gold prices have also structurally strengthened the collateral base for the entire gold loan sector.
"The medium-term outlook for gold-loan NBFCs remains positive, with temporary volatility offering selective opportunities rather than signalling a trend reversal," Dasani concluded, offering a reassuring perspective for investors.
