Manba Finance Limited is gearing up to launch its Initial Public Offering (IPO) on September 23, 2024, and it’s already making waves in the financial world. The Mumbai-based non-banking financial company (NBFC) has mobilized ₹45.25 crore from anchor investors, showcasing strong pre-IPO interest. As the subscription window opens for the public, let’s dive into what makes Manba Finance IPO worth considering.
About Manba Finance
Manba Finance is a well-established Non-Banking Financial Company-Base Layer (NBFC-BL) that primarily focuses on auto financing, offering loans for two-wheelers (2Ws), three-wheelers (3Ws)—both conventional and electric—along with used cars, small business loans, and personal loans. With an impressive presence across 66 locations in six Indian states, including Maharashtra, Gujarat, and Rajasthan, the company has built a robust distribution network of over 1,100 dealers, including 190 EV-focused dealers.
As of March 31, 2024, Manba Finance had an Assets Under Management (AUM) of over ₹900 crore, and has achieved significant growth in recent years.
Manba Finance IPO Details
- IPO Subscription Dates: September 23 – 25, 2024
- Price Band: ₹114 to ₹120 per equity share
- Issue Size: ₹150.84 crore through a fresh issue of 12,570,000 equity shares
- Lot Size: 125 shares
- Listing: Shares will list on BSE and NSE on September 30, 2024
One of the key highlights of this IPO is that there is no Offer for Sale (OFS), which means all proceeds from the fresh issue will go towards fueling the company’s future growth by bolstering its capital base.
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Financial Highlights
Manba Finance has been on a strong growth trajectory, reflected in its financials:
- Interest Income: ₹93.98 crore in FY22, rising to ₹168.36 crore in FY24.
- Total Income: ₹106.62 crore in FY22 to ₹191.63 crore in FY24.
- Net Profit: ₹9.74 crore in FY22, growing to ₹31.42 crore in FY24, showing a 76% CAGR in net profit.
- Disbursement CAGR: 47.6% between FY22 and FY24.
- Yield on Advances: The highest among its peers at 23.9%.
The company’s focus on two- and three-wheeler financing, especially in the burgeoning electric vehicle (EV) segment, positions it well in a rapidly growing market. With a growing portfolio and steady branch expansion, Manba Finance is well-prepared to ride the wave of India’s automotive growth, especially as the festive season approaches.
How Does Manba Finance Compare to Its Peers?
In comparison to other listed NBFCs like Baid Finserv Ltd, Arman Financial Services Ltd, and MAS Financial Services Ltd, Manba Finance holds its own with a P/E ratio of 14 and a P/B ratio of 1.72 at the upper price band. The company’s Return on Equity (RoE) is at 17%, and its Return on Assets (RoA) stands at 4%, making it competitive with its peers.
Notably, Manba Finance’s portfolio is heavily focused on two-wheeler loans, which make up 92% of its AUM. In comparison, Arman Financial Services has a more diversified portfolio, which may reduce direct comparability between the two companies.
Growth Potential and Market Outlook
India’s auto industry is set for tremendous growth, thanks to the rising demand for personal vehicles, a large youth population, and increasing disposable incomes. Manba Finance’s strategic focus on smaller, affordable vehicle segments and its growing presence in the EV financing space make it well-positioned to capture this market. The company’s established network, particularly in rural and semi-urban areas, adds another layer of growth potential.
With the Indian auto market expected to surge, the demand for auto financing is likely to increase, benefiting NBFCs like Manba Finance that cater to both salaried and self-employed individuals.
Should You Subscribe Manba Finance IPO?
Given the company’s strong financials, robust growth prospects, and strategic focus on key segments like electric vehicles, subscribing to the Manba Finance IPO looks like a promising investment, especially for those looking for long-term gains. The company’s growing AUM, steady income growth, and increasing profitability indicate a solid business model that can thrive in India’s expanding auto and EV markets.
Recommendation: Subscribe with a long-term investment perspective, especially if you believe in the growth of the Indian auto-finance sector. Manba Finance’s strong focus on affordable vehicle financing, rapid branch expansion, and growing dealer network make it a promising candidate for strong returns over time.
