Mumbai-based Manba Finance Ltd is gearing up to launch its Initial Public Offering (IPO) from September 23 to September 25, 2024, offering equity shares in the price band of ₹114-120 per share. The company aims to raise ₹150.84 crore through this book-built issue, with a total of 12.57 million equity shares on offer. The IPO is entirely a fresh issue, with no offer-for-sale component.
Company Profile
Manba Finance, an NBFC (Non-Banking Financial Company), primarily focuses on vehicle financing, covering a wide range of segments including two-wheelers, three-wheelers, electric vehicles, used cars, and small business loans. As of March 31, 2024, its Assets Under Management (AUM) exceeded ₹936.85 crore, reflecting a CAGR of 37.46% over the past two years. The company operates across six states through a network of 66 locations.
Financial Performance
The company has shown strong financial growth, with its net profit rising from ₹16.58 crore in FY23 to ₹31.42 crore in FY24, an impressive increase of 89.5%. Revenue also jumped by 43.71% during this period, reaching ₹191.58 crore. Manba’s profitability is driven by high interest income, fueled by its dominant position in the two-wheeler loan market, which makes up 92% of its AUM.
IPO Investment Highlights
The proceeds from the IPO will be used to bolster the company’s capital base and meet future lending needs. The company stands out with the highest yield on advances (23.9%) and a notable branch expansion CAGR of 40.3% from FY22 to FY24.
Manba Finance is well-positioned to capitalize on the growing demand in the Indian auto industry, driven by rising disposable incomes and increased vehicle ownership. Despite its focus on two-wheeler loans, which makes it less diversified compared to some peers, its strong relationships with over 1,100 dealers and promising growth prospects make it an attractive investment option for long-term investors.
Valuation and Peer Comparison
At the upper price band of ₹120, Manba Finance is priced at a P/E ratio of 14, which is in line with its peers like Baid Finserv and Arman Financial Services. The company offers a Return on Equity (RoE) of 17% and is expected to generate significant value for investors due to its robust business model and market presence.
Conclusion
Given its strong financials, rapid growth, and positioning in the auto financing sector, Manba Finance’s IPO presents a solid opportunity for investors looking to tap into India’s expanding NBFC space. Analysts suggest subscribing to the issue with a long-term investment horizon for potentially high returns.
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