| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 114 to ₹ 120 | 125 | 23rd Sep, 2024 – 25th Sep, 2024 | ₹150.84 Cr |
About Manba Finance Ltd IPO
Manba Finance Ltd. (MFL), headquartered in Mumbai, is a Non-Banking Financial Company that offers financial solutions for new two-wheelers, three-wheelers, electric vehicles, used cars, small business loans, and personal loans. As of March 31, 2024, MFL reported Assets Under Management (AUM) exceeding Rs. 9,000 million, with 97.9% of its loan portfolio focused on new vehicle loans. The company operates across 66 locations in six states, building strong relationships with over 1,100 dealers, including more than 190 electric vehicle dealers. Targeting salaried and self-employed individuals, MFL customizes its offerings to meet diverse customer needs and has recently expanded to include used car loans, small business loans, and personal loans. Typically, MFL finances up to 85% of a vehicle’s on-road price, encouraging customers to contribute the remaining balance to foster financial discipline. With a centralized credit team of 1,344 employees, MFL maintains a gross Non-Performing Asset (NPA) ratio of 3.95% for FY24 and reported a profit after tax of Rs. 314.2 million. The company’s average cost of borrowings stands at approximately 11.98%. Favorable credit ratings from agencies like CARE and Acuite further emphasize MFL’s strong financial health and commitment to effective risk management.
Objective of the Manba Finance Ltd IPO
The company proposes to utilize net proceeds towards augmenting the capital base to meet the company’s future capital requirements.
Rationale To Invest In Manba Finance Ltd IPO
Comprehensive collections infrastructure ensures strong asset quality metrics
The company has established a robust collections infrastructure to maintain asset quality, supported by a three-tier system of tele-calling, field collections, and legal recovery. With over 80% of monthly collections processed via NACH on scheduled EMI dates, an in-house team of 446 personnel ensures timely monitoring and early detection of defaults to minimize Gross NPAs, which have been steadily improving (3.95% in FY24, down from 4.94% in FY22). The company also engages external collection agencies as needed, adhering to RBI guidelines. Its tech-enabled collections team efficiently manages customer data and prioritizes overdue accounts, using soft collections strategies like SMS reminders and tele-calls in early delinquency stages. Legal action is initiated for accounts classified as NPAs when other recovery methods fail, showcasing a comprehensive and proactive approach to maintaining financial health.
Strong dealer relationships and diversified funding drive sustainable growth
The company, having started as an NBFC in 1998, built strong relationships with over 1,100 dealers, including 190 EV dealers, across six states. These dealers act as critical touchpoints for vehicle financing, helping to generate leads and facilitating quick loan turnarounds through tech-enabled processes. The company supports its dealer network with customer-specific schemes, incentives, and marketing initiatives. It has expanded operations to 66 locations with a focus on underpenetrated markets, driving growth in its AUM from Rs. 4,958.3 million in FY22 to Rs. 9,368.6 million in FY24 at a CAGR of 37.5%. Its funding is sourced from a diversified base of public and private sector banks, NBFCs, and NCD issuances. Additionally, a co-lending arrangement with Muthoot Capital Services further enhances its capital access. With a disciplined approach to cost-effective borrowing and market expansion, the company is well-positioned for sustained growth.
Valuation of Manba Finance Ltd IPO
The NBFC industry in India is poised for robust growth across segments such as two-wheelers, three-wheelers and MSME lending, driven by increasing finance penetration and consumer demand. With projected market share of 65% in two-wheeler financing and 35% in MSME loans, NBFCs are enhancing their competitiveness through digital initiatives and improved customer experiences, despite challenges like high default rates. Manba Finance Ltd. operates primarily in the funding business for two-wheelers and three-wheelers and has recently expanded its services to include personal loans, business loans, and used car loans. The company offers its services through over 1,100 dealers across six states. The company’s assets under management (AUM) grew from Rs. 4,958.3 million in FY22 to Rs. 9,368.6 million in FY24, reflecting a CAGR of 37.5%. Profit after tax rose from Rs. 97.4 million in FY22 to Rs. 314.2 million in FY24, with RoCE margins improving from 6.42% to 15.66%. Net NPA also decreased from 4.30% to 3.16%. With an average borrowing cost of 11.98% and lending rates above 20%, the company plans to use current issue proceeds to expand its offerings further. The current issue is priced at a P/BV of 2.3x based on FY24 book value, indicating a fair valuation. With its strategic focus on customer satisfaction and innovative products, Manba Finance is well-equipped to meet evolving market needs. We recommend a “SUBSCRIBE” rating for the issue with a medium to long-term investment perspective.
What is the Manba Finance Ltd IPO?
Manba Finance IPO is a book built issue of Rs 150.84 crores. The issue is entirely a fresh issue of 1.26 crore shares. Manba Finance IPO opens for subscription on September 23, 2024 and closes on September 25, 2024. The allotment for the Manba Finance IPO is expected to be finalized on Thursday, September 26, 2024. Manba Finance IPO will list on BSE, NSE with tentative listing date fixed as Monday, September 30, 2024. Login to your account now.
How to apply for the Manba Finance Ltd IPO through StoxBox?
To apply for the Manba Finance Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Manba Finance Ltd IPO open?
Manba Finance Ltd IPO is opening on 23rd September 2024.Apply Now
What is the lot size of the Manba Finance Ltd IPO?
The Lot Size of Manba Finance Ltd IPO is 125 equity shares. Login to your account now
When is the Manba Finance Ltd IPO allotment date?
The allotment Date for Manba Finance Ltd IPO is 26th September 2024. Login to your account now.
When is the Manba Finance Ltd IPO listing date?
The listing Date for Manba Finance Ltd IPO is 30th September 2024. Login to your account now
What is the minimum investment required for the Manba Finance Ltd IPO?
In the Retail segment the minimum investment required is Rs. 15,000. Login to your account now
What is the maximum investment allowed for the Manba Finance Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 195,000. Login to your account now
What are the risks associated with investing in the Manba Finance Ltd IPO?
- Intensifying competition in the financial sector: The company faces growing competition from established players like Arman Financial Services, MAS Financial Services, and Baid Finserv, alongside new entrants in the lending space including e-commerce and payment platforms. With a higher cost of borrowing and regulatory challenges, competitors may offer more attractive lending rates. This increasing competition may impact profitability, market share, and the ability to implement cost-effective growth strategies, potentially adversely affecting the company’s financial condition, operational results, and cash flows.
- Lack of product diversification: New vehicle loans constitute 97.9% of the company’s assets under management, reflecting a heavy reliance on a single product segment. Despite recent diversification efforts into used car loans, small business loans, and personal loans, the company may struggle to achieve significant growth in these areas. This lack of diversity could limit future growth prospects and adversely affect financial stability if the new vehicle loan market does not perform as expected.
- Negative cash flows and operational vulnerabilities: The company faced negative cash flows from operating activities of Rs. 1,411.4 million in FY24 and Rs. 1,240.3 million in FY23, primarily due to increased loan disbursements, which may continue to impact financial stability and growth plans. Additionally, reliance on cash recoveries exposes the business to risks of fraud and theft. Contingent liabilities, including disputed taxes of Rs. 22.7 million, further threaten financial health, highlighting the need for effective risk management strategies.
When will the Manba Finance Ltd IPO shares be credited to my Demat account?
The Manba Finance Ltd IPO be credited to the account on allotment date which is 27th September 2024. Login to your account now
Where can I find the Manba Finance Ltd IPO prospectus?
The prospectus of Manba Finance Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Arkade Developers Limited IPO?
| IPO Open Date | Monday, September 23, 2024 |
| IPO Close Date | Wednesday, September 25, 2024 |
| Basis of Allotment | Thursday, September 26, 2024 |
| Initiation of Refunds | Thursday, September 26, 2024 |
| Credit of Shares to Demat | Friday, September 27, 2024 |
| Listing Date | Monday, September 30, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 25, 2024 |
