Manba Finance IPO Sees Strong Demand on Final Subscription Day

Manba Finance IPO: The initial public offering (IPO) of Manba Finance Ltd, a non-banking financial company (NBFC), opened on September 23 and has garnered strong interest from investors. The Rs.150.84 crore IPO closes today, September 25. Manba Finance focuses on financing new two-wheelers (2W), three-wheelers (3W), electric vehicles (EV2Ws and EV3Ws), used cars, small business loans, and personal loans. As of March 31, 2024, its assets under management (AUM) stood at Rs.937 crore.

By the end of September 24, the IPO had been oversubscribed 73.18 times, receiving bids for 64.39 crore equity shares compared to the 87.99 lakh shares on offer. The retail segment saw 70.18 times subscription, while the Non-Institutional Investors (NII) portion was oversubscribed 172.23 times. The Qualified Institutional Buyers (QIB) portion received 4.15 times subscription.

Grey Market Premium (GMP)

Manba Finance shares are performing well in the grey market, where the grey market premium (GMP) for the shares stood at Rs.65 per share on September 25. This represents a 54% premium over the issue price of Rs.120 per share, signaling strong demand among investors even before the official listing.

Analysts' Recommendation

Most analysts recommend subscribing to the Manba Finance IPO due to the company's solid growth trajectory, favorable industry prospects, and reasonable valuation. Despite challenges in the rural market post-COVID, Manba has maintained strong performance, particularly in the two-wheeler financing segment.

Nirmal Bang analysts noted that Manba’s gross non-performing assets (GNPA) peaked at 4.9% in FY22, which is lower than many other vehicle financiers. Manba's AUM grew at a compound annual growth rate (CAGR) of 37% from FY22 to FY24, with return on assets (ROA) and return on equity (ROE) at 2.3% and 10.1%, respectively. With an attractive valuation at a price-to-book (P/B) ratio of 1.7x, analysts recommend subscribing to the IPO.

BP Equities also gave a "Subscribe" rating, citing Manba's strategic focus on customer satisfaction and innovative products. They consider the IPO to be fairly priced and suggest it as a good medium- to long-term investment.

IPO Details

• Issue Size: Rs.150.84 crore (entirely a fresh issue of 1.26 crore shares)
• Price Band: Rs.114 to Rs.120 per share
• Lot Size: 125 shares (minimum investment of Rs.15,000 for retail investors)
• IPO Dates: Opened on September 23, closes on September 25
• IPO Allotment Date: Expected on September 26
• Listing Date: Expected on September 30 (BSE and NSE)
• Book Running Lead Manager: Hem Securities
• IPO Registrar: Link Intime India Private Ltd

Use of Proceeds

The funds raised from the IPO will be used to enhance Manba Finance’s capital base to meet future capital requirements, helping the company expand its operations and meet growing market demand.

Also read: Hyundai Motor India to Launch $3 Billion IPO: First in Two Decades

With strong demand and favorable market conditions, the Manba Finance IPO has been heavily oversubscribed. Investors are keen on the company's growth prospects, particularly in the two-wheeler and electric vehicle financing segments, making this IPO a promising opportunity for both short- and long-term gains.