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Baring ups stake in India's Manappuram Finance

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Baring Private Equity Partners India has upped its stake in Manappuram Finance, a listed non-bank financial company (NBFC) specializing in gold loans, to 11.56% from an earlier 9.48% via open market purchases.

"Baring India on July 16, acquired 1.50 million equity shares of the company through its two funds - Baring India Private Equity Fund II (Fund 2) and Baring India Private Equity Fund III (Fund 3)," Manappuram Finance said in a filing.

Sequoia Capital, India Equity Partners and Siguler Guff & Company are among other PE investors in the NBFC.

Baring India started buying into the company in November 2011 with an initial 1.4% stake. It has made further share purchases as Manappuram's stock price has fallen since February 2012. According to VCCircle estimates, Baring India has put in over INR2.25 billion ($37.7 million) into the company to date.

After growing rapidly between 2009 and 2012, Manappuram has seen a decline in revenues in the last financial year. It had revenues for the full year 2013 of INR10.3 billion, down 32.67% year-on-year.

Manappuram uses gold as collateral for loans and the decline in gold price is expected to impact the quantum of lending against gold, which could further shrink its earnings going forward.

Baring India is also an investor in another gold finance firm - Muthoot Finance.

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