After garnering strong response for its ₹151 crore initial public offering (IPO), shares of Manba Finance kicked-off trading on the domestic bourses on a robust note, in an otherwise weak broader market. The shares of Manba Finance were listed at ₹150 apiece on the BSE, a premium of 25% over the issue price of ₹120. On the NSE, the NBFC stock opened 20.8% higher at ₹145 as compared to the IPO price.
Post listing, Manba Finance shares touched a high of ₹157.45 on the BSE, up 31.2% over the IPO price, while the market capitalisation rose to ₹791 crore. The counter saw more than 11 lakh shares changing hands over the counter in the first hour of trade so far.
The listing of Manba Finance was in line with Street estimates as the shares of non-banking finance company were commanding a grey market premium (GMP) of ₹33 in the unlisted market, indicating listing price to be around ₹153 (up 27.5%).
The Mumbai-based Manba Finance, that specialises in financing two-wheelers and used cars, raised ₹151 crore via IPO route at a price band of ₹114-120, which was entirely a fresh issue of 1.26 crore shares. The issue received an overwhelming response from investors, subscribing 224.05 times as it secured bids worth ₹23,656.86, which opened for subscription between September 23 to September 25. The lot size of the IPO was 125 shares and in multiples thereafter.
The public issue was subscribed 143.95 times in the retail category, 148.55 times in qualified institutional buyer, and 511.62 times in the non-institutional investors’ portion.
The company intends to use IPO proceeds for augmenting the capital base to meet the its future capital requirements.
Established in 1998, the company offers financial solutions for new two-wheeler (2Ws), three-wheeler (3Ws), electric two-wheeler (EV2Ws), electric three-wheeler (EV3Ws), used cars, small business loans, and personal loans with an AUM size of more than ₹ 90,000 lakhs as on March 31, 2024. As per the DRHP document filed with the SEBI, nearly 98% of their loan portfolio comprises new vehicle loans with an average ticket size (ATS) of around ₹ 80,000 for two-wheeler loans and an average ticket size (ATS) of around ₹1,40,000 for three-wheeler loans.
Manba Finance has established relationships with more than 1,100 dealers, including more than 190 EV dealers, across Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh, and Uttar Pradesh.
Domestic brokerage Anand Rathi in its IPO recommendation said that at the upper price band of ₹114-120, the company is valuing at P/BV of 1.70x with a market cap of ₹602.80 crore post issue of equity shares and return on net worth of 15.66%. It has recommended a “Subscribe-Long Term” rating to the IPO, saying that the issue is “fairly priced”.
The company recently entered into a co-lending arrangement with Muthoot Capital Services Limited on an 80:20 fund-sharing basis in terms of RBI guidelines, where 80% of the funds are provided by Muthoot Capital, and the remaining 20% is their obligation. As of Fiscals 2024, 2023, and 2022, their total borrowings were ₹75,227.24 lakhs, ₹59,593.01 lakhs, and ₹39,439.73 lakhs, respectively. Their average cost of borrowings for fiscals 2024, 2023, and 2022 was 11.98%, 11.19%, and 11.61%, respectively.
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