Unlisted shares of Manba Finance Ltd are trading Rs 58 higher in the grey market, signalling a 48.33 per cent listing gain from the public issue.
Manba Finance IPO: The initial public offering of non-bank financial institution Manba Finance Ltd is going to be closed today, Wednesday. The price band of the Rs 150.84-crore IPO has been fixed at Rs 114 to Rs 120 per share for the public issue. Till 10:27 am on the final day of bidding on Monday, the IPO received a whopping 89.71 times subscription garnering bids for 78,93,45,750 shares as against the 87,99,000 shares on offer.
The category for non-institutional investors received 225.75 times subscription, while the portion for retail individual investors (RIIs) got subscribed 80.23 times. The QIB category received a 4.26 times subscription.
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Manba Finance IPO: Key Dates
The IPO is available for public subscription between September 23 and September 25. The share allotment of the Manba Finance IPO will likely be finalised on September 26, while its shares will be listed on both BSE and NSE on September 30.
Manba Finance IPO: Price Band
The price band of the Rs 150.84-crore much-awaited IPO has been fixed at Rs 114 to Rs 120 per share for the public issue.
Manba Finance IPO: GMP Today
According to market observers, unlisted shares of Manba Finance Ltd are trading Rs 58 higher in the grey market than its issue price. The Rs 58 grey market premium or GMP means the grey market is expecting a 48.33 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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Manba Finance IPO: Analysts’ Recommendations
Most brokerages have given a ‘subscribe’ recommendation to the IPO.
Brokerage firm Nirmal Bang Securities in its IPO note said Manba has managed to deliver strong performance despite a weak rural recovery post COVID-19 being a NBFC focused on the 2W segment. Manba witnessed its GNPA peak out in FY22 at 4.9 per cent which is much lower compared to other vehicle financiers.
“On the back of a low base and expansion in new geographies, Manba has been able to grow its AUM at 37 per cent CAGR over FY22-24 and has generated ROA/ROE of 2.3 per cent/10.1 per cent which is in line with other listed vehicle financiers, while its valuation appears attractive at FY24 P/B of 1.7 times,” it said with a ‘subscribe’ recommendation.
Another brokerage firm Swastika gave a ‘subscribe with caution’ to the IPO.
In its IPO note, Swastika said Manba Finance, which is leading financier specialising in two- and three-wheelers, plans to expand its product offerings. It has demonstrated robust growth in revenue, NIM and other positive financial metrics. The IPO valuation appears to be fully priced.
“Investors with a high-risk tolerance may consider applying for the IPO. However, careful consideration of the company’s size and potential risks and market volatility is essential,” it added.
Another brokerage StoxBox recommended a ‘subscribe’ rating to the IPO.
“The current issue is priced at a P/BV of 2.3 times based on FY24 book value, indicating a fair valuation. With its strategic focus on customer satisfaction and innovative products, Manba Finance is well-equipped to meet evolving market needs. We recommend a ‘subscribe’ rating for the issue with a medium to long-term investment perspective,” StoxBox said.
Brokerage company SMIFS expects Manba Finance’s 2-wheeler sales volume to increase at a CAGR of 8-10% to 23.9 million with a sales value of Rs 18,64,480.4 million in FY27. We expect two-wheeler disbursements to grow at a 14-16% CAGR from FY24 to FY27, driven by the recovery in scooter sales with improvement in urban sentiments, increased two-wheeler EV penetration, and improving rural infrastructure. Manba has about 97.90 per cent of its loan portfolio in new vehicle loans with an ATS of around Rs 80,000 for 2 wheeler loans and an ATS of around Rs 1,40,000 for three-wheeler loans.
“We recommend investors with medium risk appetite to subscribe to the issue as a long term investment as the company is small with limited presence across the country as on date and elevated NPA levels, though with decent growth track record and also decent growth opportunity in future,” SMIFS said in its IPO note.
Manba Finance IPO: More Details
Manba Finance’s IPO is entirely a fresh issue of up to 1.26 crore shares worth Rs 151 crore at the upper end of the price band. Currently, promoters hold 100 per cent stake in the Maharashtra-based Manba Finance.
Proceeds from the issues will be utilized to augmenting the capital base to meet the company’s future capital requirements towards onward lending and for general corporate purposes.
The company said that half of the issue size has been reserved for qualified institutional buyers, 35 per cent for retail investors, and the remaining 15 per cent shares for non-institutional investors.
Further, investors can bid for a minimum of 125 equity shares and in multiples of 125 equity shares thereafter.
Manba Finance provides financial solutions for auto loans, used cars, small business loans and personal loans. It currently operates across 66 locations in six states — Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh and Uttar Pradesh.
Its Assets Under Management (AUM) increased to Rs 936.85 crore in FY24 from Rs 495.82 crore in FY22 with a CAGR of 37.5 per cent.
Manba Finance’s profit surged 89.5 per cent to Rs 31.41 crore in the financial year 2023-24, from Rs 16.58 crore in the previous year. Besides, revenue grew 44 per cent to Rs 191.58 crore during FY24 from Rs 133.32 crore.
Hem Securities is the sole lead manager to the issue.
