The initial public offering (IPO) of Manba Finance opens for bidding on Monday, September 23 and can be subscribed until Wednesday, September 25. The company is offering its shares in the range of Rs 114-120 apiece, wherein investors can apply for a minimum of 125 equity shares and its multiples thereafter.
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 Rs 150.84 crore IPO of Manba Finance is entirely a fresh share sale of 1,25,70,000 equity shares. The net proceeds from the issue shall be utilized towards augmenting the capital base to meet the company’s future capital requirements.
Manba Finance raised Rs 45.25 crore from eight institutional investors by allocating them 37.71 lakh equity shares at Rs 120 apiece. Its anchor book included names like Chartered Finance & Leasing, Finavenue Capital Trust, Antara India Evergreen Fund, Belgrave Investment Fund, Meru Investment Fund, NAV Capital VCC, Rajasthan Global Securities and Vikas India EIF I Fund.
Manba Finance targets mainly employees and self-employed individuals. It tailors its offerings to each of these customer categories and creates customized programs. It typically finances up to 85 per cent of the purchase price of the vehicle the customer wishes to purchase and prefers the customer to contribute the balance.
Manba Finance has a strong network branch in urban, semi-urban and metropolitan cities and towns serving the surrounding rural areas. The company has established relationships with more than 1,100 dealers, including more than 190 EV dealers in Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh and Uttar Pradesh.
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.
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. Here's what brokerage firms say about the IPO of Manba Finance:
Nirmal Bang Securities Rating: Subscribe Being a NBFC focused on the 2W segment, Manba has managed to deliver strong performance despite a weak rural recovery post covid. Manba witnessed its GNPA peak out in FY22 at 4.9 per cent which is much lower compared to other vehicle financiers, said Nirmal Bang Securities.
"On the back of a low base and expansion in new geographies, Manba has been able to grow its AUM at 37 per cent CAGR over FY22-24 and has generated ROA/ROE of 2.3 per cent/10.1 per cent which is in line with other listed vehicle financiers, while its valuation appears attractive at FY24 P/B of 1.7 times," it said with a 'subscribe' recommendation.
Arihant Capital Markets Rating: Subscribe for listing gains Manba Finance is well-positioned for lucrative growth through strategic expansion into 66 locations across six states, leveraging a hub-and-spoke model and a strong focus on customer and dealer satisfaction, resulting in significant growth in AUM. It plans to introduce used car loans, small business loans, and personal loans further diversify the portfolio, said Arihant Capital Markets.
"With robust relationships with dealers it efficiently addresses customer needs for vehicle financing, particularly in the growing EV market, where new vehicle Loans constitute 97.90 per cent of its AUM. Additionally, diversified funding sources and a co-lending arrangement enhance financial management. We are recommending subscribe for listing gains for this issue," it added.
SMIFS Ratings: Subscribe with caution Manba Finance has about 97.90 per cent of its loan portfolio in new vehicle loans with an ATS of around Rs 80,000 for 2Ws loans and an ATS of around Rs 1,40,000 for 3Ws loans. Manba Finance has entered into arrangements with more than 190 EV dealers and offers various incentives to customers for purchasing EV2Ws and EV3Ws vehicles, said SMIFS.
"We recommend investors with medium risk appetite to subscribe to the issue as a long term investment as the company is small with limited presence across the country as on date and elevated NPA levels, though with decent growth track record and also decent growth opportunity in future," it added.
Swastika Investmart Rating: Subscribe with caution Manba Finance is leading financier specializing in two- and three-wheelers, with plans to expand its product offerings. It has demonstrated robust growth in revenue, NIM and other positive financial metrics. The IPO valuation appears to be fully priced, said Swastika Investmart in its IPO note.
"Investors with a high-risk tolerance may consider applying for the IPO. However, careful consideration of the company's size and potential risks and market volatility is essential," it added.
StoxBox Ratings: Subscribe Manba Finance offers its services through over 1,100 dealers across six states. The company's AUM grew to Rs 936.86 crore in FY24, reflecting a CAGR of 37.5 per cent. Profit after tax rose to Rs 31.42 crore in FY24, with RoCE margins improving to 15.66 per cent. Net NPA decreased to 3.16 per cent. The company plans to use issue proceeds to expand its offerings further, said StoxBox.
"The current issue is priced at a P/BV of 2.3 times based on FY24 book value, indicating a fair valuation. 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.
Canara Bank Securities Rating: Subscribe for long term Manba Finance is strategically expanding its product portfolio to reduce the concentration risk in two-wheeler financing and tap into new segments. The company uses advanced technology to optimize its operations and disburse loans quickly, providing a fast turnaround time for its customers, said Canara Bank Securities.
"The company has shown solid financial performance with robust growth of net interest income and profit after tax of 36 per cent and 80 per cent respectively CAGR FY22-24, it carries a significant concentration risk due to its heavy reliance on two-wheeler loans and asset quality remains lower as compared to peers. We recommend 'subscribe' rating to this issue," it said.
Marwadi Financial Services Rating: Subscribe Manba Finance is set to list at a P/B of 1.72 times with a market cap of Rs 602.87 crore, whereas its peers, such as Baid Finserv, Arman Financial Services, and MAS Financial Services are trading at P/B ratios of 1.18 times, 2.27 times, and 2.84 times, respectively, said Marwadi Financial Services.
"We assign 'subscribe' rating to this IPO as company has ability to expand to new underpenetrated geographies. Also, it is available at reasonable valuation as compared to its peers," it said.