MANBA FINANCE is a Non-Banking Financial Company (NBFC) specializing in providing a diverse range of financial solutions, including loans for new two-wheelers (2Ws), three-wheelers (3Ws), electric two-wheelers (EV2Ws), electric three-wheelers (EV3Ws), used cars, small business loans, and personal loans. As of March 31, 2024, the company boasts an Assets Under Management (AUM) exceeding ₹90,000 Lakhs, demonstrating its significant market presence and operational capacity.

The Manba Finance IPO is a Book Built Issue aiming to raise ₹150.84 Crores, consisting entirely of a Fresh Issue of 125.7 Lakh Shares. The subscription period runs from September 23, 2024, to September 25, 2024, with allotment expected on September 26, 2024. The shares will be listed on both the BSE and NSE, with a tentative listing date set for September 30, 2024.

Subscription Details

The share price band for the Manba Finance IPO is set between ₹114 to ₹120 per share, with a minimum lot size of 125 shares. Retail investors need to invest a minimum of ₹15,000, while High-Net-Worth Individuals (HNIs) are required to invest for 14 lots (1,750 shares), totaling ₹2,10,000.

As of 12:02 PM on September 23, 2024, the IPO has garnered strong interest, being subscribed 7.80 times on its first day. The Grey Market Premium (GMP) is estimated to range between ₹45 to ₹50, suggesting potential listing gains of 38% to 42%. However, investors are advised to approach the GMP cautiously, as it reflects speculative trading and does not guarantee actual market prices upon listing.

Anchor Investors and Capital Utilization

Manba Finance has successfully raised ₹45.25 Crores from Anchor Investors at a price of ₹120 per share, allocating 37,71,000 equity shares to them. This interest from institutional investors reinforces confidence in the company’s growth potential and operational strategy.

Objectives of the IPO

The proceeds from the Fresh Issue will be utilized primarily to augment the company’s capital base, enabling it to meet future capital requirements and continue expanding its service offerings.

Financial Performance Overview

Manba Finance has shown impressive financial growth in recent fiscal years. The company’s revenue increased from ₹10,661.94 Millions in Fiscal 2022 to ₹19,163.22 Millions in Fiscal 2024. Similarly, EBITDA surged from ₹6,304.11 Millions in FY22 to ₹12,525.27 Millions in FY24, while the Profit After Tax (PAT) rose from ₹974.02 Millions in FY22 to ₹3,141.97 Millions in FY24.

For the Manba Finance IPO, the company is issuing shares with a pre-issue Earnings Per Share (EPS) of ₹8.34 and a post-issue EPS of ₹6.25. The pre-issue Price-to-Earnings (P/E) ratio is 14.38x, while the post-issue P/E ratio stands at 19.2x, compared to an industry average of 13.45x. The company’s Return on Capital Employed (ROCE) for FY24 is 19.39%, and the Return on Equity (ROE) is 15.66%, indicating that the IPO is fairly priced based on solid financial fundamentals.

Investment Recommendation

Given the company’s robust financial performance, strong subscription interest, and favorable potential for listing gains, we recommend that Risky Investors Apply to the Manba Finance Limited IPO. This IPO presents an attractive opportunity for immediate gains upon listing and long-term investment growth, given the expanding market for financial solutions provided by the company.

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