Bain Capital bet Rs 4,000 crore on gold. The RBI just walked all over it |
Gold is India’s oldest deity, and lending, her oldest ritual. So naturally, gold lending, the religion that binds the two together, has its fair share of believers. But it’s now drawing a set of new ones.
In the last two years, as faith fled from everything else and took refuge in gold, sending it soaring, private investors and large banks turned fresh converts to this religion. And one of their latest prayers is expected to crystallise this week.
Bain Capital will spendBusiness Standard Rs 4,385 crore ($463 million) for a shot at a controlling stakeBain Capital is investing around Rs 4,000 crore for an 18% stake in Manappuram Finance. This could stretch to 41.7% at a cost of Rs 10,000 crore after it completes an open offer, which is a formal invitation to buy shares directly from the public so that minority investors have a chance to exit when a company’s control changes in India’s second biggest gold-loan NBFC, Manappuram Finance—making it the largest private-equity bet that the sector has ever seen. This comes as the sector itself is going through one of its largest expansion exercises, with lenders set to open 3,000 new gold-lending branches over the next year.
The Reserve Bank of India (RBI), though, is anything but devout.
Barely two months after Bain announced the deal in March 2025, the RBI issued new gold-loan regulations that, when they come into effect on 1 April, threaten NBFCs’ decades-long lending playbook. Worse, the RBI went a step further and stalled the Bain-Manappuram deal for almost a year. Its objection? The PE firm’s 93% stake in another NBFC, Tyger Capital, formerly known as Adani Capital.
The RBI is now forcing a trade-offBusiness Line: if Bain wants Manappuram, it must divest its controlling stake in Tyger Capital.
All this is happening as the deity herself has seen the first real wobble since its manic rally began two years ago, falling 20%CBS News from its all-time-high in January.