Manba Finance Limited, a Non-Banking Financial Company - Base Layer (NBFC-BL), has opened its Initial Public Offering (IPO) to raise ₹150.84 Crores. The entire issue consists of a Fresh Issue of 125.7 Lakh shares with no Offer for Sale component. Manba Finance provides diverse financial solutions such as New Two-Wheeler (2W) and Three-Wheeler (3W) loans, Electric Vehicles (EV) financing for 2Ws and 3Ws, Used Car loans, Small Business Loans, and Personal Loans. As of March 31, 2024, the company boasts an Assets Under Management (AUM) of ₹90,000 Lakhs.

IPO Details

The Manba Finance IPO has a price band set between ₹114 to ₹120 per equity share, with a minimum lot size of 125 shares. Retail investors can participate with a minimum investment of ₹15,000, while High-Net-Worth Individuals (HNIs) need to invest in a minimum of 14 lots (1,750 shares), amounting to ₹2,10,000.

The IPO subscription opened on September 23, 2024, and closes on September 25, 2024. The allotment date is expected on September 26, 2024, with shares likely to list on BSE and NSE on September 30, 2024. The book-running lead manager for the issue is Hem Securities Limited, and Link Intime India Private Limited serves as the registrar.

Market Sentiment and GMP

As of 12:02 PM on September 23, 2024, Manba Finance's IPO received a robust subscription, showing 7.80 times on the first day. The Grey Market Premium (GMP) is estimated to be in the range of ₹45 to ₹50, indicating potential listing gains of 38%-42%. However, the GMP is based on unregulated market activity and should be viewed for informational purposes only.

Financial Performance

Manba Finance has shown strong financial performance in recent years. The company's revenue for Fiscal 2024, 2023, and 2022 stood at ₹19,163.22 Million, ₹13,331.71 Million, and ₹10,661.94 Million, respectively. The EBITDA for the same periods was ₹12,525.27 Million in 2024, ₹8,385.19 Million in 2023, and ₹6,304.11 Million in 2022.

The Profit After Tax (PAT) figures for Fiscal 2024, 2023, and 2022 were ₹3,141.97 Million, ₹1,658.01 Million, and ₹974.02 Million, respectively. These numbers reflect the company’s growth trajectory and operational efficiency.

Manba Finance is offering shares at a pre-issue EPS of ₹8.34 and a post-issue EPS of ₹6.25. The pre-issue P/E ratio stands at 14.38x, while the post-issue P/E ratio is 19.2x, compared to the industry’s P/E ratio of 13.45x. The company's Return on Capital Employed (ROCE) is 19.39%, and Return on Equity (ROE) is 15.66% for FY24, indicating that the IPO is priced fairly in relation to its financial metrics.

Use of IPO Proceeds

The proceeds from the Manba Finance IPO will be utilized to:

Augment the capital base to meet the company’s future capital requirements. This will ensure that the company can continue to expand its loan portfolio and capture more market share in the growing NBFC sector.

Conclusion and Recommendation

With its strong financial performance, robust market demand, and competitive pricing, the Manba Finance IPO offers an attractive opportunity for investors. The Grey Market Premium suggests significant listing gains, making it appealing to risky investors looking for short-term profits or those seeking long-term investment opportunities.

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