Momentum on
Technical pick by many now
2 Likes
I don’t recollect if in last 5 years Manappuram management (led by Nandkumar family) even granted any ESOP.
Now more than 2 Cr ESOPs are proposed to be granted https://www.bseindia.com/xml-data/corpfiling/AttachLive/10a5cb78-891e-42e3-b61b-c9eaf6c77d73.pdf
Look like professional KMPs appointed by Bain Capital would be direct beneficiaries of these ESOPs - which seems a fair practice - reward the performance.
3 Likes
https://img.etimg.com/photo/123229575.cms
Positive triggers
High gold price
High good ticket
Bain plus new ceo
Moving towards more secure lending
Colending with banks
New branch approval in pipeline
Challenges
Competetion
Low ticket high Yiekd product reducing
3 Likes
Read latest concall. My takeaways are:
- After Bain capital, Manappuram is inching its gold AUM slowly to 90 % of overall AUM.
- Unsecured lending will become 10 % of AUM in near future.
- Company is planning to first convert non gold 1100 branches of Asirvad into gold lending branches. I thinks once bain acquisition is over, RBI nod for gold branch expansion will be applied for.
- New CEO deepak reddy appears to be confident and clear and clearly ducks the question of one of the analyst saying that he has many things in mind, but he needs to visit more branches and employees as he has joined the company hardly 6 days ago.
- Company is reducing yield slowly to match with the peers in gold loan.
I think , Bain capital will bring good business competency. Overall I will hold the company.
Disclaimer: holding and views are biased. Started buying from 89 levels and bought till 150 levels during ED FIR fiasco. I think good upside is still left from these levels once the new management starts delivering.
9 Likes
They have guided gold loan business: non gold business to be 75%: 25% from 65:35 now
2 Likes
Tried to play with some numbers:
Current state: Before any allocation of shares to Bain Capital
Market Cap → Rs. 22450 Cr
Net worth → Rs. 12500 Cr (Consolidated as on Q1FY2026)
Market Price → Rs. 265 per share
Number of Shares → 84.65 Crores in total issued
So approx. 1.8 times Price to Book valuation, considering sorry state of profitability in Asirvad, Bain selected CEO already in place, change in Gold loan biz strategy, high NPAs in HFC, CV & PL books, and well known open offer price (for shared to be acquired by Bain Capital).
Future state: Post allocation of shares to Bain Capital (may be by March 2026)
Fresh Capital Infusion by Bain in Manappuram → Rs. 4400 Crores
Expected Additonal profit in Q2, Q3, & Q4 of FY2026 → Rs. 600 Crores (assuming consistent losses in MFI but with QOQ reduction)
Net Networth as on March 31, 2026 → Rs. 17,500 Crores. (i.e. 12500 as on Q1 + 4400 of bain + 600 of additonal profits)
Additonal Shares to Bain → 18.60 Crore shares
Net Shares as on March 31, 2026 → 103.25 Crore total outstanding
With Same Price to Book i.e. 1.8 Times → Market Cap ~ Rs. 31,500 Crores → Results in Market Price → Rs. 305 per share
With reduced Price to Book i.e. 1.5 Times → Market Cap ~ Rs. 26,250 Crores → Results in Market Price → Rs. 254 per share
With Improved Price to Book i.e. 2.0 Times → Market Cap ~ Rs. 35,000 Crores → Results in Market Price → Rs. 339 per share
Disclaimer: Above numbers are just for estimation purpose by an existing shareholder (hence 100% bias with expectation of better returns), if things goes well or worse, what could be the implications.
Side Note: In Major Gold loan NBFC players P/B of Muthoot ~ 3+, of IIFL Finance ~ 1.5; In diversified NBFCs P/B of Chola 5+, Shriram 2+, ABC 2+, Sundram 4+, L&T 2+, Poonawala 4+, JM Financials 1.75+, Edelweiss 2+.
Source of Data → Screener, Company Annual Report, Quarterly results presentation and Corporate announcement on Bain Capital transaction.
10 Likes
The biggest advantage of having international promoter like bain is access to funds from international markets which are at substantial lower rates compared to rasing funds from india.this simply will increase there net intrest margins by a significant amount.this gives them edge over any of there competitors be it muthhod finance ,as anyone would want to pawn there gold to a company giving lower intrest rates or even if that doesn’t happen the current borrowing cost would come down significantly .I doubt that this would trade at p/b of 2 ,bain has been known to invest in exit with 2 to 3x of there initial investment.
It is anybody guess where the share price will go but p/b 2 i think is a very pessimistic.the only reason the stock is still trading low is because of ashirwadh ,if and when that is sorted i feel the stock will do good.
7 Likes
Very good insights…but anybody can tell about gold finance business cyclical nature? What are key observable parameters which will indicate the peak of cyclical nature of business? Is it something other than gold prices?
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Historically, no major “pure-play” gold finance NBFC in India has ever gone bankrupt due to a cyclical downturn.
The primary reason for this resilience is their secured lending model. Unlike other NBFCs that lend for vehicles, housing, or to micro-enterprises, gold loan companies’ loans are backed by physical gold as collateral. This gold is a highly liquid asset with intrinsic value, which means that even if a borrower defaults, the company can auction the gold to recover the loan amount.
While other NBFCs have failed due to credit risk tied to economic cycles (e.g., IL&FS and DHFL), the gold loan business is protected by the counter-cyclical nature of gold and a strict Loan-to-Value (LTV) ratio mandated by the RBI. The main risks for these companies are operational failures or an unprecedented, massive drop in gold prices, not a typical economic recession.
4 Likes
I don’t think this is a cyclical buisness,i think we are just going to see tailwinds in the sector.
My theory is the last 2 genration in india were the genration that used to save money but the current genration (millennials and genz are the spending type) evidence os the uptick in growth in credit cards,buy now pay later schemes.India holds the highest amount of gold any country holds,going forward i think when the assets such as gold are passed on i see a boom in the buisness of gold lending firms as not eyeryone has a strong credit history.
1 Like
Microfinance fatigue is showing up in rural India. Overleveraged borrowers are seeing credit lines tighten as companies have tightened disbursements. The fallback has been gold, driving a clear uptick in gold finance volumes.
For now, this shift benefits listed NBFCs with gold lending franchises. But sustainability is the key question: is this just a temporary credit substitution, or the start of a longer runway for gold backed lending?
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Gold financing is inherently non-cyclical—indeed, it is often counter-cyclical. Management has repeatedly emphasized that rising gold prices do not automatically translate into higher borrowing by customers. When gold prices rise, the tonnage pledged typically declines, since borrowers can raise the same loan amount by pledging a smaller quantity of gold.
With conservative loan-to-value (LTV) ratios, the lender’s risk is largely limited to two factors:
- Operational risk around storing and securing physical gold (which is fully insured), and
- Auction risk—the possibility of delayed recovery if collateral needs to be liquidated.
A pure-play gold loan business can consistently deliver around 20% RoE with remarkable stability. The major setbacks arose not from gold loans themselves, but from diversification into other segments. Unlike gold loans—where collateral is liquid and easily realizable—microfinance and vehicle finance are far more cyclical, exposed to credit cycles and economic shocks, and lack the same level of security.
5 Likes
And overall mix to be 90% secured and 10% non-secured. Meaning more of gold, secured MSME, secured housing loans. This should provide the much needed stability in profits , asset quality and RoE.
2 Likes
An year, full of so many events from MFI Ban to Lifting of ban, beyond imagination write-offs to increasing NPAs across verticals, acquisition announcement by Bain Capital to open offer price to appointment of CEO to change in gold loan AUM growth strategy…
But this easy calculation to compare the two leading Gold Loans NBFCs has stood the test (in last 1 year).
I wish this get reverse now onwards.
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It seems sebi has cleared/ disposed off the proposed bain capital’s investment in manappuram on 12/09/2025. Whether accepted or rejected don’t know. No disclosure by management so far.Source : sebi website.
Disclosure: holding.
Think .. Final approval from RBI matters .. and they must have zero reservation on coming Bain Capital as co-promoters.
As per last Concall management was expecting RBI approval within a month, but I think it must be on the way either during Navratri or around Diwali.
For above understanding - just saw this notification issued by company today - informing RBI’s approval on Bain Capital’s Nominated Directors.
Manappurqm finance is a rerating candidate. At 2 x bv on fy25 , gold rates at life time high , new management and capital infusion may lead to significant valuation re rating and earni g growth over 3 years .
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U are right it’s a rerating candidate for sure ,gold at all time high and Bain just entered the business .Bain has excellent track record .Lending business is ever green
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https://asirvadmicrofinance.co.in/wp-content/uploads/2025/10/Financial%20Results_September%202025%20(2).pdf asirvad micro finance Q2 result out. Not so great. Still loss of 214 crores before tax in Q2 2026 Vs Q1 437 cr loss vs 101 crores profit of Q2 fy 2025.
1 Like