Manba Finance IPO: A Promising Investment Opportunity
The initial public offering (IPO) of Manba Finance Ltd has opened to significant interest from investors, with the subscription period running from September 23 to September 25, 2023. With a target of raising ₹150.84 crore, this IPO has already garnered strong demand, indicating a positive market sentiment towards the company.
Company Overview
Manba Finance is a non-banking finance company (NBFC) that specializes in financing new two-wheelers (2W), three-wheelers (3W), electric two-wheelers (EV2Ws), electric three-wheelers (EV3Ws), used cars, small business loans, and personal loans. As of March 31, 2024, the company reported an asset under management (AUM) of ₹937 crore, showcasing its robust position in the financial services sector.
Subscription Status
As of September 24, the Manba Finance IPO had been oversubscribed by an impressive 79.13 times. The public issue received bids for approximately 69.62 crore equity shares against an offer of 87.99 lakh shares, according to data from the National Stock Exchange (NSE).
- Retail Investors: The retail portion of the IPO was subscribed 74.97 times.
- Non-Institutional Investors (NII): This segment saw a staggering subscription rate of 188.78 times.
- Qualified Institutional Buyers (QIB): The QIB segment was subscribed 4.17 times.
These figures reflect a strong appetite for the shares, particularly among institutional investors, which often signals confidence in the company’s future prospects.
Grey Market Premium (GMP)
The grey market premium (GMP) for Manba Finance shares is currently at ₹65 per share, translating to a premium of 54% over the issue price of ₹120 per share. This strong GMP indicates that investors are willing to pay significantly more than the issue price, further underscoring the high demand for the shares in the unlisted market.
Should You Apply?
Analysts are largely optimistic about the Manba Finance IPO, recommending subscription based on several factors:
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Strong Performance: Despite challenges in the rural economy post-COVID, Manba Finance has demonstrated resilience and growth. The company’s gross non-performing assets (GNPA) peaked at 4.9% in FY22, which is relatively low compared to other vehicle financiers.
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Growth Trajectory: Manba Finance has achieved a remarkable 37% compound annual growth rate (CAGR) in AUM from FY22 to FY24, alongside generating a return on assets (ROA) of 2.3% and return on equity (ROE) of 10.1%. These metrics align well with industry standards.
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Valuation: The company’s valuation appears attractive, with a price-to-book (P/B) ratio of 1.7x based on FY24 estimates. This suggests that the shares are reasonably priced relative to the company’s book value.
- Market Position: With a strategic focus on customer satisfaction and innovative financial products, Manba Finance is well-positioned to adapt to evolving market needs.
Nirmal Bang and BP Equities have both issued positive recommendations, suggesting that investors consider this IPO as a medium to long-term investment opportunity.
IPO Details
- Subscription Dates: September 23 to September 25, 2023
- Price Band: ₹114 to ₹120 per share
- Lot Size: 125 shares
- Minimum Investment: Approximately ₹15,000 for retail investors
- Use of Proceeds: The net proceeds from the IPO will be utilized to augment the company’s capital base to meet future requirements.
The allotment of shares is expected to be finalized on September 26, with the listing date set for September 30 on both the BSE and NSE.
Conclusion
The Manba Finance IPO presents a compelling opportunity for investors looking to enter the growing NBFC sector. With strong demand reflected in the subscription rates and a favorable GMP, this IPO is attracting attention from both retail and institutional investors. As always, potential investors should conduct their own research and consider consulting with financial advisors before making investment decisions.
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