Manappuram Group to receive fresh capital

Kochi: Manappuram Group of companies is to receive fresh capital infusion to the tune of Rs 108 crore , including those from a UK and a US-based private equity firm, the group Chairman, Mr V. P. Nandakumar, said.

While the UK-based Alchemy Ashmore is to invest to the tune of Rs 32 crore in Manappuram General Finance and Manappuram Finance (Tamil Nadu) Ltd, the US-based private equity fund, Granite Hill, is to invest Rs 6 crore in the two companies.

The investments will be in the form of Compulsory Convertible Preference Shares, which would be converted into equity at a minimum price of Rs 166.62 per share, Mr Nandakumar said. Sequoia Capital Growth Investments I, a private equity fund managed by Sequoia Capital, is to invest Rs 16.37 crore in the two companies while Hudson Equity Holdings, a fund managed by India Equity Partners, is to infuse similar amounts into the two companies, a press release said. Both Sequoia and India Equity are existing investors, holding approximately 11.5 per cent in both the companies.

Simultaneously, the promoters would also be subscribing to warrants of Rs 26.075 crore and Rs 11.75 crore in the two companies. Each of these warrants would also be converted into one equity share at a minimum price of Rs 166.62 per share over the next 18 months. The group has called an AGM to formally approve the proposed equity infusion among other things, the release said. The company is expected to complete the whole process by October 10.

The equity infusion is not expected to cause any major changes in the management except that one Director representing Alchemy Ashmore would be joining the board of the company. Mr Shailesh Mehta, Managing Partner of Granite Hill, is also expected to join as an independent director on the board in his personal capacity.