Manba Finance IPO Sees Over 46 Times Subscription on Day 2
The Manba Finance IPO is making waves in the financial markets, attracting significant interest from investors. With a subscription rate of over 46 times by the second day, this initial public offering is poised to be one of the standout events in the Indian stock market this month.
Overview of the Manba Finance IPO
Based in Mumbai, Manba Finance is currently offering its shares within a price band of Rs 114-120 per share. Investors can apply for a minimum of 125 shares, and multiples thereafter, making it accessible for retail participants and institutional investors alike. The company aims to raise Rs 150.84 crore through the IPO, which involves a fresh share sale of 1,25,70,000 equity shares.
The IPO opened for bidding on Monday, September 23, and by the end of the first day, it had already garnered nearly 24 times the subscription, showcasing strong demand across various investor categories.
Subscription Highlights
As of 1 PM on Tuesday, September 24, investors had made bids for an impressive 40,67,16,875 equity shares, leading to a staggering subscription rate of 46.22 times compared to the 87,99,000 shares offered. Here’s a breakdown of the subscription rates:
- Non-Institutional Investors (NIIs): 92.94 times
- Retail Investors: 50.14 times
- Qualified Institutional Bidders (QIBs): 3.06 times
This overwhelming demand illustrates the confidence investors have in Manba Finance’s business model and growth prospects.
What Does Manba Finance Do?
Founded in 1998, Manba Finance is a non-banking finance company (NBFC) that provides a wide range of financial solutions, including:
- Loans for new two-wheelers (2Ws) and three-wheelers (3Ws)
- Financing for electric two-wheelers (EV2Ws) and electric three-wheelers (EV3Ws)
- Loans for used cars
- Small business loans
- Personal loans
This diverse portfolio positions Manba Finance well within the growing Indian automotive and financing sectors.
The Grey Market Premium and Investor Sentiment
The grey market premium (GMP) for Manba Finance shares has seen an uptick amid positive market trends and strong bidding on the first day. As of the latest updates, the GMP is hovering around Rs 64-65, suggesting a potential listing gain of approximately 54% for investors.
Brokerage firms are largely optimistic about this IPO. They highlight several factors for subscribing:
- Strong Financial Performance: Manba Finance has demonstrated significant growth in its key metrics:
- Net Interest Income (NII): CAGR of 35.1% from FY22 to FY24
- Total Income: CAGR of 35.2%
- Profit Before Operations (PPoP): CAGR of 48.7%
- Profit After Tax (PAT): CAGR of 79.6%
- Assets Under Management (AUM): CAGR of 37.5%
These numbers underscore the robust growth trajectory of the company.
Investment Considerations and Risks
Despite the positive outlook, investors should be aware of potential risks. Key concerns include:
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Rising Cost of Capital: Increased interest rates could impact borrowing costs and, subsequently, profitability.
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Increased Bad Loans: As with any lending business, the risk of defaults is always present, particularly in an uncertain economic environment.
However, analysts remain confident, stating that Manba Finance is positioned to thrive with its strong dealer relationships, a diversified product range, and a focus on geographical expansion to mitigate concentration risk.
IPO Structure and Listing Plans
In terms of share allocation for this IPO:
- Qualified Institutional Bidders (QIBs): 50%
- Non-Institutional Investors (NIIs): 15%
- Retail Investors: 35%
Manba Finance is set to list at a P/B ratio of 1.72 times with a market capitalisation of Rs 602.87 crore. This valuation is considered reasonable when compared to its peers, which are trading at higher multiples.
The sole book-running lead manager for the Manba Finance IPO is Hem Securities, while Link Intime India serves as the registrar. The shares are expected to be listed on both the BSE and NSE, with a tentative listing date of Monday, September 30.
Conclusion: A Promising Investment Opportunity
With the Manba Finance IPO receiving substantial investor interest, it’s clear that the company has captured the attention of the market. The robust subscription rates, combined with a strong business model and positive financial growth, make this IPO a compelling opportunity for investors looking to capitalise on the growing demand for financial services in India.
As the bidding continues and we approach the final day, it will be interesting to see how the market reacts and whether the enthusiasm continues. For those considering an investment, keeping an eye on the final subscription figures and GMP will be crucial in making an informed decision.
