The much-anticipated Initial Public Offering (IPO) of Manba Finance, a non-banking finance company (NBFC), is set to open on 23rd September 2024. The company aims to raise Rs 150.84 crore through this public issue, with investors able to subscribe until 25th September. Ahead of the official opening, the grey market has shown a strong demand for the IPO, reflecting positive sentiment among investors.
Grey Market Premium (GMP) Signals 50% Gains
In the grey market, Manba Finance’s IPO is trading at a premium of Rs 60 as of 22nd September 2024. This premium indicates that shares could potentially list at around Rs 180 per share, offering a solid 50% profit for investors who buy at the IPO price. However, it’s important to note that grey market premiums are speculative and can fluctuate.
This IPO has consistently maintained a premium of Rs 60 for the last three days, signaling sustained interest from market participants. While the grey market premium is an encouraging indicator, investors should approach it with caution, as it does not guarantee the actual listing price.
IPO Price Band and Investment Details
The price band for Manba Finance’s IPO has been set at Rs 114-120 per share. Investors can place bids for a minimum of 125 equity shares per lot, with the minimum investment amounting to Rs 15,000 for retail investors. The IPO will issue 1.25 crore fresh equity shares, and there will be no Offer for Sale (OFS), meaning all funds raised will be retained by the company.
The IPO will be open to different categories of investors:
- 50% of the issue is reserved for qualified institutional buyers (QIBs).
- 35% is allocated for retail investors.
- 15% is reserved for non-institutional investors (NIIs).
Manba Finance’s Business Overview
Manba Finance is a Maharashtra-based NBFC that offers financial solutions across various sectors. The company’s portfolio includes loans for two-wheelers, three-wheelers, used cars, small businesses, and personal loans. The company’s Assets Under Management (AUM) have surpassed Rs 900 crore, demonstrating its significant presence in the financial sector.
Manba Finance is fully owned by the Manish Shah family, giving it a stable ownership structure that has helped the company grow consistently over the years.
How Will the IPO Funds Be Used?
The funds raised from the IPO will be used to strengthen Manba Finance’s capital base. The company plans to utilize the proceeds to meet future capital requirements, helping it expand its business and continue serving customers with financial solutions.
Hem Securities is serving as the sole merchant banker for the IPO, overseeing the issue and ensuring a smooth process for investors.
Financial Performance of Manba Finance
Manba Finance has shown impressive financial growth over the years. For the fiscal year ending in March 2024, the company reported a net profit of Rs 31.4 crore, marking an 89.5% increase compared to the previous year. Net interest income also saw a rise of 26%, reaching Rs 87.6 crore. However, the company’s net interest margin (NIM) decreased slightly, dropping from 12.31% to 11.16%.
On the asset quality front, Manba Finance experienced a minor increase in its Non-Performing Assets (NPA). The company’s gross NPA rose by 21 basis points to 3.95%, while the net NPA increased by 2 basis points to 3.16%. Despite this slight dip in asset quality, Manba Finance remains in a strong financial position with a growing profit and income base.
Manba Finance’s IPO is generating excitement among investors, especially with strong grey market activity suggesting potential profits. With a reasonable price band, an expanding business, and impressive financials, the IPO offers a promising opportunity for those looking to invest in the NBFC sector. However, as with all investments, investors need to consider all factors before making a decision.
