Introduction to Manba Finance IPO
The initial public offering (IPO) for Manba Finance, a non-banking finance company (NBFC), is set to open for subscription on 23 September and will remain available until 25 September. The company aims to raise approximately Rs 150.84 crore through this public issue, with a price range established between Rs 114 and Rs 120 per share. Excitingly, demand for the IPO has been notably strong in the grey market, showcasing investor interest ahead of its official launch.
Grey Market Demand Insights
Investor sentiment surrounding the Manba Finance IPO has been decidedly positive, as evidenced by its performance in the grey market. As of 22 September, shares are trading at a premium of Rs 60 in the unlisted market, suggesting an anticipated listing price of Rs 180. Should this projection hold true, investors could stand to gain a remarkable profit of 50%. It is important to note that while the grey market premium serves as an indicator of potential stock performance, it is subject to fluctuation and may change before the IPO officially launches.
Investment Details
Investors interested in participating in the IPO can bid for a minimum of 125 equity shares, with additional shares available in multiples of 125. This means that retail investors will need to allocate a minimum investment of Rs 15,000 to take part. The IPO consists of the issuance of 1.25 crore fresh equity shares, with no shares being offered through an Offer for Sale (OFS). Consequently, all proceeds from the IPO will be directed to Manba Finance itself.
Utilization of Funds
The funds raised through this IPO will primarily be employed to enhance Manba Finance’s capital base, allowing the company to meet future capital requirements and support its ongoing operations. Notably, Hem Securities has been designated as the sole merchant banker for this public issue. The allocation of shares is structured such that 50% is reserved for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors.
Business Overview
Manba Finance operates as an NBFC with an assets under management (AUM) exceeding Rs 900 crore. The company specializes in offering a range of financial solutions, including financing options for two-wheelers, three-wheelers, used cars, small business loans, and personal loans. It is worth mentioning that the company is entirely owned by the Manish Shah family, which provides additional stability and accountability to its governance structure.
Financial Performance
Manba Finance has demonstrated impressive financial performance over recent years. For the fiscal year ending March 2024, the company’s net profit surged by 89.5%, reaching Rs 31.4 crore, compared to the previous financial year. Additionally, net interest income increased by 26%, amounting to Rs 87.6 crore during this period. However, it is worth noting that the net interest margin experienced a slight decline from 12.31% to 11.16%, and the company’s asset quality showed some signs of deterioration, with gross non-performing assets (NPA) rising by 21 basis points to 3.95%, and net NPA increasing by 2 basis points to 3.16% compared to the previous fiscal year.
Conclusion
As the Manba Finance IPO approaches, the buzz in the grey market and the company’s solid financial background suggest a potentially lucrative opportunity for investors. With a well-structured offering and clear intentions for the utilization of funds, Manba Finance is positioning itself for further growth in the competitive finance sector.
