The Manba Finance Initial Public Offering (IPO), a highly anticipated event in the Indian financial market, is closing today. This IPO marks an important milestone for Manba Finance Ltd, a non-banking financial company (NBFC) focused on vehicle financing. With an IPO size of ₹150.84 crore, the company has attracted significant attention from investors. The price band for the IPO is set at ₹114 to ₹120 per share. Here’s everything you need to know about the subscription status, important dates, grey market premium (GMP), and expert recommendations.
Manba Finance IPO Overview
Manba Finance, a leading financier in the two- and three-wheeler segments, launched its IPO with a price band of ₹114 to ₹120 per share. The IPO, which opened for subscription between September 23 and September 25, has garnered impressive demand from investors across categories. The offering includes a fresh issue of up to 1.26 crore equity shares, valued at approximately ₹151 crore at the upper end of the price band. The proceeds from the IPO will be used to strengthen the company’s capital base and support its future lending operations.
The Manba Finance IPO has already seen overwhelming interest, with a total subscription of 89.71 times as of the final day of bidding. This level of demand showcases the strong investor sentiment around the company’s business model and growth potential in the vehicle financing sector.
Manba Finance IPO Subscription Status
The subscription status of the Manba Finance IPO is a clear reflection of its popularity among different investor categories:
- Non-Institutional Investors (NIIs): This category received the highest response, with a subscription rate of 225.75 times.
- Retail Individual Investors (RIIs): The retail portion was subscribed 80.23 times, a remarkable figure that indicates strong retail participation.
- Qualified Institutional Buyers (QIBs): The QIB category saw a subscription of 4.26 times.
Overall, the IPO garnered 78,93,45,750 bids against the 87,99,000 shares on offer by 10:27 AM on the final bidding day.
Important Dates for Manba Finance IPO
For those who participated or are considering participating in the Manba Finance IPO, here are the key dates to note:
- IPO Subscription Period: September 23, 2024 – September 25, 2024
- Allotment Finalization: September 26, 2024
- Listing Date: September 30, 2024, on both BSE and NSE.
Manba Finance IPO Price Band and Lot Size
The price band for the Manba Finance IPO has been fixed between ₹114 and ₹120 per share. Investors could place bids in multiples of 125 equity shares, with a minimum lot size of 125 shares. This translates to a minimum investment of ₹14,250 at the lower end of the price band.
Manba Finance IPO Grey Market Premium (GMP)
As of today, the grey market is showing positive signs for the Manba Finance IPO. According to market observers, the shares are trading at a ₹58 premium in the grey market over the issue price. This grey market premium (GMP) indicates a 48.33% listing gain, reflecting strong investor optimism about the company’s listing performance. While GMP is an unofficial indicator and can fluctuate based on market sentiment, it gives a glimpse into the market’s expectations for the stock’s debut.
Analysts’ Recommendations on Manba Finance IPO
Brokerages have largely given positive recommendations for the Manba Finance IPO. Here’s a summary of the key analysts’ opinions:
Nirmal Bang Securities: Subscribe
Nirmal Bang has given a ‘subscribe’ recommendation, citing Manba’s strong performance despite challenges in the rural economy post-COVID-19. The company’s focus on the two-wheeler segment, combined with its expanding geographic presence, has allowed it to grow its Assets Under Management (AUM) at a 37% CAGR over FY22-FY24. Nirmal Bang also noted that Manba’s Gross Non-Performing Assets (GNPA) peaked at just 4.9% in FY22, which is lower than other vehicle financiers, reflecting sound asset quality.
Swastika: Subscribe with Caution
Swastika recommended a ‘subscribe with caution’, acknowledging Manba’s solid growth trajectory, including revenue, Net Interest Margin (NIM), and other financial metrics. However, Swastika highlighted concerns about the fully priced valuation of the IPO, advising high-risk investors to proceed with caution given the company’s size and the market’s volatility.
StoxBox: Subscribe for Medium to Long Term
StoxBox provided a ‘subscribe’ rating with a medium to long-term perspective, noting that Manba Finance is strategically positioned to capitalize on customer satisfaction and innovation. The brokerage firm added that the IPO is fairly priced with a Price to Book Value (P/BV) of 2.3 times based on FY24 data, making it an attractive investment for long-term growth.
SMIFS: Positive Outlook for Two-Wheeler Financing
SMIFS projected that Manba’s two-wheeler sales volume would grow at a CAGR of 8-10% to 23.9 million units by FY27, with a sales value of ₹18,64,480.4 million. The firm expects two-wheeler loan disbursements to grow at a 14-16% CAGR from FY24 to FY27, supported by improving urban and rural demand and increasing penetration of electric vehicles (EVs) in the two-wheeler segment.
Manba Finance IPO: Financial Performance
Manba Finance has delivered strong financial results over the last few years. As of FY24, the company’s AUM stood at ₹936.85 crore, up from ₹495.82 crore in FY22, representing a 37.5% CAGR. Profit surged 89.5% to ₹31.41 crore in FY24, compared to ₹16.58 crore in the previous year. The company’s revenue also grew by 44%, reaching ₹191.58 crore in FY24.
Key Financial Highlights
- AUM (FY24): ₹936.85 crore
- Profit Growth (FY24): ₹31.41 crore (89.5% increase)
- Revenue (FY24): ₹191.58 crore (44% increase)
Manba Finance Business Model
Manba Finance primarily offers loans for two- and three-wheelers, which make up 97.90% of its loan portfolio. With an Average Ticket Size (ATS) of ₹80,000 for two-wheeler loans and ₹1,40,000 for three-wheeler loans, the company has a solid position in the vehicle financing industry. Operating across 66 locations in six states (Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh, and Uttar Pradesh), Manba Finance continues to expand its geographic footprint to tap into new markets.
Conclusion
The Manba Finance IPO has seen tremendous demand, with high subscription rates across investor categories. Backed by strong financials, a robust business model, and positive market sentiment, the IPO is poised to deliver significant gains for investors. With brokerages largely recommending a ‘subscribe’ rating, the Manba Finance IPO is considered a promising investment, particularly for those with a medium to long-term investment horizon.
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