Manba Finance’s IPO opens on Monday. What are the GMP signals from the subscription?

The 151 crore IPO (IPO) of a non-banking financial company (NBFC) based in Mumbai Manba Finance It will open for public subscription on September 23 and close on September 25. Prior to the issue, the grey market premium (GMP) for Manba Finance was around Rs 55-60, suggesting a 46% premium over the issue price.

The price band for the IPO has been fixed at Rs 114-120 per share.

The IPO is a completely fresh issue of up to 1,257,000 shares without any offer for sale component. The total issue size of Rs 151 crore has been calculated based on the price in the upper band.

The company intends to use the proceeds from the new issue to increase its capital base and meet future capital requirements.

The issue will be carried out through the book-building process, wherein not more than 50% of the issue will be allotted to qualified institutional buyers (QIBs), not less than 15% to non-institutional investors (NIIs) and not less than 35% to retail investors.

Headquartered in Mumbai, the company offers financial solutions to both salaried and self-employed individuals, offering a fast turnaround time (TAT) for loan approval and disbursal. In FY24, Manba Finance had one of the highest share of two-wheeler loans, accounting for 92% of its assets under management (AUM). It also ranked third in AUM per branch at Rs 14.41 crore, behind the likes of Arman Financial, Baid Financial ServiceBerar Finance, Hero Fincorp, MAS Financial, Muthoot Fincorp and TVS Credit. Manba Finance also had the fastest branch growth with a CAGR of 40.3% from FY22 to FY24. Manba Finance’s AUM increased from Rs 495.82 crore in FY22 to Rs 936.85 crore in FY24, reflecting a compound annual growth rate (CAGR) of 37.46%.

The company posted a profit of Rs 31.41 crore in FY24, up 89.50% from Rs 16.58 crore in the previous year. Revenue for FY24 grew significantly to Rs 191.58 crore from Rs 133.32 crore in FY23, up 43.71%, driven primarily by higher interest income.

Manba Finance will list its shares on the Boston Stock Exchange (BSE) and the New York Stock Exchange (NSE). Hem Securities is the sole lead manager for the issue and Link Intime India is the registrar for the issue.

(Disclaimer: The recommendations, suggestions, views and opinions of the experts are their own and do not represent the views of the Economic Times)

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