RBI Approves Management Change at Manappuram Finance Limited

Manappuram Finance Limited, a leading non-banking financial company in India, has received approval from the Reserve Bank of India (RBI) for a change in its management. This marks a major step in the completion of the ongoing preferential issue and open offer transactions initiated earlier this year.

Background of the Transaction

Earlier in March 2025, the Company had executed a Securities Subscription Agreement (SSA) with investors BC Asia Investments XXV Limited and BC Asia Investments XIV Limited, which involved the issuance of:

• 9,29,01,373 fully paid equity shares at INR 236 per share

• 9,29,01,373 warrants, each convertible into one equity share at INR 236 per warrant

The total subscription amount aggregated to INR 2,192.47 crore, establishing a significant financial transaction aimed at infusing capital and restructuring management.

Alongside the SSA, a Shareholders’ Agreement (SHA) was executed to define management rights, governance, and inter se obligations between the investors and existing promoters V.P. Nandakumar and Sushama Nandakumar.

RBI Approval and Board Changes

Pursuant to regulatory requirements, the RBI has now approved the appointment of Mr. Rishi Mandawat and Mr. Ashish Kotecha as Additional Directors on the board of Manappuram Finance Limited. Both directors are non-executive and non-independent, nominated by the investors to strengthen oversight and governance.

This approval is a critical condition precedent for completing the underlying transaction, which includes the preferential issue of shares and warrants, as well as the mandatory open offer to public shareholders under SEBI Takeover Regulations.

Open Offer and Regulatory Compliance

The open offer, initiated by the investors in March 2025, aims to comply with SEBI Regulations 2011 for substantial acquisition of shares and takeovers. Public announcements, detailed statements, and draft letters of offer have already been filed and published in accordance with regulatory guidelines.

The consummation of these transactions is now contingent upon the satisfaction of conditions precedent, including final approvals from the RBI for the Company, Asirvad Micro Finance Limited, and Manappuram Home Finance Limited.

Strategic Implications

This management change reflects a strategic step towards enhancing governance and aligning with investor interests. The appointment of experienced directors is expected to strengthen operational oversight, improve corporate governance, and ensure regulatory compliance across all Manappuram group entities.

Conclusion

The RBI approval for the change in management of Manappuram Finance Limited, along with the appointment of Rishi Mandawat and Ashish Kotecha as additional directors, marks a significant milestone in the preferential issue and open offer process. The completion of these transactions will reshape the promoter structure while maintaining strict adherence to SEBI and RBI regulations, positioning the company for continued growth and strengthened governance.

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