Manba Finance is planning its initial public offering(IPO), which will open on 23 Sep 2024 and close on 25 Sep 2024. In terms of the IPO size, it is seeking to mop up around ₹150.84 crores as a fresh issue of the same amount. The price band is ₹114 to ₹120 per share, and shares will be listed on both BSE and NSE from September 30, 2024. Further down here is an all-inclusive IPO overview and the company itself.
Table of Contents
Company Overview: Manba Finance
Manba Finance Limited is an NBFC-BL that specializes in financing all automobile loans, including two-wheelers, four-wheelers, electric vehicles, used car finance, small business finance, and personal loans. The company has its registered office in Maharashtra with over 66 operational areas and has a strong connection with 1,100 dealerships, out of which 190 are EV dealers spread across Indian states such as Maharashtra, Gujarat, and Rajasthan, among others.
The company is well known for its fast loan sanction and disbursal process. It offers customized schemes for salaried individuals and self-employed clients.
IPO Details
- IPO Open Date: September 23, 2024
- IPO Close Date: September 25, 2024
- Face Value: ₹10 per equity share
- Price Band: ₹114 to ₹120 per share
- Issue Size: ₹150.84 crores
- Type: Book Built Issue
- Retail Quota: 35%
- QIB Quota: 50%
- NII Quota: 15%
- Listing: BSE & NSE on September 30, 2024
Market Lot
The minimum market lot for a retail investor is 125 shares, which amounts to a minimum investment of ₹15,000. The retail investor can apply for up to 13 lots, or 1625 shares, requiring a maximum investment of ₹195,000.
Industry Analysis
Manba Finance is an NBFC sector company focused on automobile loans and small personal loans. As a sector, it has seen tremendous growth, particularly in the context of a growing need for electric vehicles and small-ticket loans. It leveraged the trend by entering into alliances with EV dealers and expanded its loan book to a wider customer base spectrum.
Financial Statements
Manba Finance has delivered outstanding financial performance over the past few years:
| Year | Revenue (₹ Cr) | Expense (₹ Cr) | Profit After Tax (₹ Cr) | Assets (₹ Cr) |
|---|---|---|---|---|
| 2022 | 106.62 | 93.96 | 9.74 | 561.46 |
| 2023 | 133.32 | 110.53 | 16.58 | 787.27 |
| 2024 | 191.63 | 152.74 | 31.42 | 973.75 |
Manba Finance has shown a 60% upsurge in revenue from 2023 to 2024 and a 90% rise in profit in the same period. This is an indication of its strong market space with effective management.
Valuation Metrics
Some of the key valuation metrics for FY2024 are:
- Return on Equity (ROE): 15.66%
- Return on Capital Employed (ROCE): 19.39%
- EBITDA Margin: 65.38%
- Debt-to-Equity Ratio: 3.75
- Earnings Per Share (EPS): ₹8.34
- Net Asset Value (NAV): ₹53.26
Competitive Advantage
The following are the competitive advantages of Manba Finance:
- Quick loan processing and disbursement: Highly popular due to its fast turnaround, Manba Finance is a perfect NBFC for those customers who seek fast loans.
- Strong dealer network: The Company has an extensive dealer network having more than 1,100+ dealers and 190+ EV dealers of Manba Finance, mainly in western and northern regions of India.
- Diversified loan offerings: The company has various loan segments as electric vehicles, which is a growing market in India.
Management Team
The leadership team that runs the company comprises a strong management team who have vast knowledge and expertise in finance and the loan disbursal mechanism. Key promoters include Manba Investments and Securities Private Limited and Manish Kiritkumar Shah (HUF), who have been instrumental in increasing the operations of the company and market exposure.
Risk Factors
Some of the potential risks for the investors are:
- High debt levels: The debt-to-equity for the company is at 3.75, so it has a lot of leverage that could cause the company problems if interest rates rise or the economy takes a downward turn.
- Market competition: NBFC is a rather competitive business. Some of the larger players will be able to take a piece of the share from Manba Finance’s pocket.
Dividend Policy
Manba Finance does not have an announced dividend policy on its books but the company will most likely use earnings to fund future growth.
Recent News and Developments
Some of the loans that have been recently added to its list include used car loans, small business loans, and personal loans; this is in line with preparation for considerable growth shortly.
Expert Opinions
Financial analysts will advise investors to subscribe to the Manba Finance IPO in the long term. This is because the company has a good financial record, and its vehicle loan market is certain to increase shortly and because management is effective.
In this regard, investors are advised to exercise caution owing to high levels of debt and competition risk.
Investment Outlook
Manba Finance is among those promising growth stocks with a strong presence in both the vehicle loan and electric vehicle finance sectors, sectors known for growth. In light of its robust revenue growth and profitability, the IPO could well be an excellent investment for anyone looking for long-term returns. However, and as would apply to all investments, care should be taken to execute this with proper counseling by financial advisors.
Comparison with Peers
| Company | EPS | PE Ratio | RoNW % | NAV | Income |
|---|---|---|---|---|---|
| Baid Finserv Limited | 1.08 | 13.65 | 7.75 | 13.89 | 66.36 Cr. |
| Arman Financial Services Limited | 195 | 8.57 | 21.36 | 775.70 | 661.53 Cr |
| MAS Financial Services Limited | 15.31 | 18.13 | 14.25 | 108.71 | 1285.68 Cr |
FAQs for Manba Finance IPO
What is price band for Manba Finance IPO?
The price band for IPO would be ₹ 114 to ₹120 per share.
When would the IPO be open and when is the date of closing of the IPO?
The IPO will open on September 23, 2024, and will close on September 25, 2024.
In which stock exchange would be the share listed?
Shares will be listed in BSE and NSE from September 30, 2024.
What is the minimum investment quantity for a retail investor?
The minimum investment value for a retail investor is ₹15,000, which is valued at 125 shares.
What does Manba Finance primarily specialize in?
Manba Finance primarily specializes in financing all automobile loans, two-wheelers, four-wheelers, electric vehicles, used car finance, small business finance, and personal loans.
How is the performance of the financial of the company?
Manba Finance has great financial performance with revenue up by 60% and profits up by 90% from FY2023 to FY2024.
What are the company’s key valuation metrics?
Main valuation metrics for FY2024: return on equity of 15.66%, return on capital employed of 19.39%, EBITDA margin of 65.38%, debt-to-equity ratio of 3.75, EPS of ₹8.34, and NAV of ₹53.26.
What are the competitive advantages of the company?
Manba Finance has competitive advantages that include quick loan processing and disbursement, a strong dealer network, diversified loan offerings, and a strong management team.
What risk factors exist for Manba Finance?
Risk potential lists high debt, market competition, and the dividend policy of the company.
Is it advisable to invest in the Manba Finance IPO?
The financial analyst would generally recommend the investor to invest in this IPO in the long run as the company gives out a healthy and strong performance on its financials and growth potential from the automobile loan market. At the same time, the investor must be cautious because of high debt levels and competition risk.
How does Manba Finance compare to its peer group?
From the comparison of Manba Finance with others given in the prompt with EPS, PE ratio, RoNW, NAV, and income, the following points are derived
The outlook for the NBFC sector looks like this
The NBFC sector is expected to continue to grow because of an increasing demand in light of electric vehicles and small-ticket loans.
Disclaimer: The blog post is a guide and not an investment advice. Any investments should be based on individual circumstances, after careful consideration of all relevant factors. Professional advice should be sought from a qualified financial advisor before any investment is made.
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