Manappuram may get a new shareholder
Manappuram Finance is up about 2% at Rs. 15.7 on BSE, after giving up most of the early morning gains, when it opening at a high of Rs. 16.15. It is reported that US based ace PE investor TPG is looking to purchase minority stake in India’s largest gold financing NBFC in addition to acquiring board seat and governance rights.
TPG, which owns 22.6% of Shriram City, having 30% of its revenues from gold loans, may be allotted preference shares or acquire through a secondary purchase from existing shareholders or a mix of both. Key shareholders of Manappuram Finance are Baring PE (10.7%), Smallcap World Fund (6.5%), Hudson Equity/ India Equity Partners (5.3%) and HSBC Bank (4.1%) among others. Promoter holding is at 31.55%. The deal may be struck in any range between 5% to CMP at the lower end (i.e. around Rs. 16.80 per share) or the book value, at the upper end, which was Rs. 30 per share as of 30th June 2013.
This news definitely marks the revival of PE interest in the company in particular and the sector as a whole marred by volatile gold prices and a slue of policy action from RBI to curb its 35%+ annual growth rates to modest 18-24% range.
Interestingly, peer Muthoot Finance is buzzing louder, being up 4% at Rs. 93.50 per share.