Baring Private Equity Partners India has increased its stake in gold loan firm Manappuram Finance Ltd to 9.48 per cent, according to a stock market disclosure. The PE firm acquired an additional 2.3 per cent stake in tranches for around Rs 45-50 crore over the past 4-5 months.
Manappuram share price has gone into a tailspin and has halved over this period.
The latest tranche was acquired earlier this week and the additional stake purchase through open market transactions seems to be part of a move to bring down the average cost of share acquisition at a higher price in the past.
The PE firm bought the additional shares via its Baring India Private Equity Fund III Listed Investments Ltd and Baring India Private Equity Fund II Ltd.
Manappuram shares last traded at Rs 19.30 a unit, down 2.28 per cent in a weak Mumbai market on Friday.
Last year, Baring PE India hiked its stake to 7.18 per cent by acquiring an additional 1.23 per cent stake.
It started buying into the firm in late 2011, starting with 1.4 per cent stake for $10.87 million. Based on the current share price, the value of the PE firm’s investment in the public-listed company would be underwater.
Manappuram Finance is one of the two large gold finance firms, the other being Muthoot Finance, which is also a portfolio company of Baring PE India. The company is also into asset financing and fee-based financing. It is backed by a host private equity firms including Sequoia Capital and India Equity Partners. However, in January this year, India Equity Partners part-exited the firm.
(Edited by Sanghamitra Mandal)