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The initial public offering (IPO) of Manba Finance saw a strong response from the investors during the first day of the bidding process. The issue, which kicked-off for bidding on Monday, September 23, was mostly subscribed by retail and HNI investors. The issue sailed through in just a few minutes.
Mumbai-based Manba Finance is selling its shares in the price band of Rs 114-120 apiece. Investors can apply for a minimum of 125 shares and its multiples thereafter. It is looking to raise Rs 150.84 crore via IPO, which is entirely a fresh share sale of 1,25,70,000 equity shares.
According to the data, the investors made bids for 6,83,20,875 equity shares, or 7.76 times, compared to the 87,99,000 equity shares offered for the subscription by 12 noon on Monday, September 23. The three-day bidding for the issue will conclude on Wednesday, September 25.
The allocation for retail was subscribed 10.78 times, while the portion reserved for non-institutional investors (NIIs) investors saw a subscription of 10.63 times. However, the quota set aside for qualified institutional bidders (QIBs) quota saw bids for 33 per cent for their allocations as of the time.
Established in 1998, Manba Finance is a non-banking finance company (NBFC) offering financial solutions for new two-wheelers (2Ws), three-wheelers (3Ws), electric two-wheelers (EV2Ws), electric three-wheelers (EV3Ws), used cars, small business loans and personal loans.
The grey market premium of Manba Finance has remained stable amid the rising trend in the broader markets and solid bidding on day one. Last heard, the company was commanding a premium of Rs 60 in the unofficial market, suggesting a listing pop of about 50 per cent for the investors.
Brokerage firms, largely have a positive view on the issue and suggest to subscribe to it on the back of strong financials, rising demand of loans and proposed expansion of the business. However, rising cost of capital and increased bad loans are the key concerns for the company.
Manba Finance has demonstrated consistent growth, with its loan book expanding significantly. It has become a trusted name, especially in semi-urban and rural areas, thanks to its extensive network of branches and customer touchpoints. With a strong focus on innovation and financial inclusion, it continues to grow its market presence, said Ventura Securities.
It operates in six states- Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh and Uttar Pradesh and its target customers are currently 60 per cent salaried and 40 per cent self employed. The company finances around 85 per cent of the value of the vehicle to be financed, it added with a ‘subscribe’ tag.
Manba Finance has reserved 50 per cent of the shares for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) have a reservation of 15 per cent of the equity shares. Retail investors have a reservation of 35 per cent portion allocated to them in the IPO.
Manba Finance reported a net profit of Rs 31.42 crore with a revenue of Rs 191.63 crore for the financial year 2024. The company reported a net profit of Rs 16.58 crore with a revenue of Rs 133.32 crore for the year ended March 2023. The total market capitalization of Manba Finance IPO is Rs 602.87 crore.
The current issue is priced at a P/BV of 2.3x based on FY24 book value, indicating a fair valuation, said StoxBox. “With its strategic focus on customer satisfaction and innovative products, Manba Finance is well-equipped to meet evolving market needs. We recommend a ‘subscribe’ rating for the issue with a medium to long-term investment perspective,” it said.
Hem Securities is the sole book running lead manager of the Manba Finance IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Monday, September 30 as the tentative date of listing on the bourses.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.