Manba Finance IPO: Invest from 23-25 Sept 2024; Price Band of ₹114 to ₹120 Per Share

Established in 1998, Manba Finance Limited is a non-banking finance company (NBFC-BL) 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 company's target customers are mainly employees and the self-employed. Manba Finance typically finances up to 85% of the vehicle's purchase price. The company has established relationships with more than 1,100 dealers, including more than 190 EV dealers across six states in India. As of 31st March 2024, the company employed a total of 1,344 people.

The Objectives of the Issue

Manba Finance Limited intends to utilise the Net Proceeds from the Issue towards the following objective is Augmenting the capital base to meet the Company's future capital requirements. 

Highlights of Manba Finance IPO

Manba Finance IPO is set to launch with a book-built issue of ₹150.84 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 23rd September 2024 and closes on 25th September 2024.
• The allotment is expected to be finalised on 26th September 2024.
• Refunds will be initiated on 26th September 2024.
• Credit of shares to Demat accounts is expected on 27th September 2024.
• The company will tentatively list on BSE and NSE on 30th September 2024.
• The price band is set at ₹114 to ₹120 per share.
• The fresh issue comprises 1.26 crore shares, aggregating to ₹150.84 crores.
• The minimum lot size for the application is 125 shares.
• Retail investors need to invest a minimum of ₹15,000.
• The minimum investment for small NII (sNII) is 14 lots (1,750 shares), amounting to ₹210,000.
• The minimum investment for big NII (bNII) is 67 lots (8,375 shares), amounting to ₹1,005,000.
• Hem Securities Limited is the book-running lead manager for the IPO.
• Link Intime India Private Ltd serves as the registrar.

Manba Finance IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 25th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors must complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Manba Finance IPO Issue Details/Capital History

Manba Finance IPO is scheduled from 23rd September to 25th September 2024, with a price band of ₹114 to ₹120 per share and a face value of ₹10. The total issue size is 1,25,70,000 shares, raising up to ₹150.84 crores through a fresh issue. The IPO will be listed on BSE and NSE. The pre-issue shareholding is 3,76,69,410 shares.

Manba Finance IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 125 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Manba Finance Ltd

Strengths:

• Established presence in the NBFC sector since 1998
• Diverse product portfolio covering various vehicle financing options
• Strong dealer network across six states
• Quick turnaround time for loan sanction and disbursement
• Centralised credit team for efficient loan processing

Weaknesses:

• Concentrated geographical presence in western, central, and north India
• High dependence on the vehicle financing segment
• Relatively high cost of borrowings

Opportunities:

• Expansion into new geographical areas
• Growing demand for electric vehicle financing
• Potential for growth in small business and personal loan segments

Threats:

• Intense competition in the NBFC sector
• Regulatory changes affecting the NBFC industry
• Economic slowdowns impacting vehicle sales and loan demand

Financial Highlights: Manba Finance Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

Manba Finance Limited has shown significant growth in recent years. The company's revenue increased by 44% and profit after tax (PAT) rose by 90% between the financial year ending on 31st March 2024 and 31st March 2023.

Assets have shown strong growth, increasing from ₹56,145.80 lakh in FY22 to ₹97,375.39 lakh in FY24, representing a growth of about 73.4% over two years.

Revenue has grown substantially, rising from ₹10,661.94 lakh in FY22 to ₹19,163.22 lakh in FY24, marking an impressive increase of 79.7% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹974.02 lakh in FY22 to ₹3,141.97 lakh in FY24, representing a substantial growth of 222.6% over two years.

Net Worth has shown steady growth, increasing from ₹15,174.38 lakh in FY22 to ₹20,060.75 lakh in FY24, a growth of about 32.2% over two years.

Total Borrowings have increased from ₹39,439.73 lakh in FY22 to ₹75,227.24 lakh in FY24, representing an increase of about 90.7% over two years. This significant borrowing increase, coupled with growing assets and revenue, suggests that the company is in an expansion phase.

The company's financial performance shows a trend of strong revenue growth and improving profitability. The increase in borrowings is substantial and should be considered in light of the company's growth strategy and risk management practices. Investors should evaluate these financial trends, the company's market position, and future growth prospects when considering the IPO.