Manba Finance IPO Opens to Strong Demand as Grey Market Premium Surges

The initial public offering (IPO) of Manba Finance Limited commenced today, aiming to raise ₹150.84 crore through a fully fresh issue of shares. The offer will remain open to investors until September 25, 2024. This initiative appears to have captured significant attention in the market, as evidenced by its subscription rate.

The price band for the Manba Finance IPO is fixed between ₹114 and ₹120 per share, with investors required to bid for a minimum lot size of 125 shares. This equates to a minimum investment of ₹15,000 for retail investors. For non-institutional investors, different bidding thresholds apply, with sNII needing 14 lots and bNII 67 lots, requiring investments of ₹210,000 and ₹1,005,000, respectively.

In the grey market, Manba Finance shares have been trading at a premium of approximately ₹60, indicating a strong sentiment among potential investors. Observers note that this premium reflects an optimistic outlook on the IPO’s performance upon listing.

Arun Kejriwal, Founder of Kejriwal Research and Investment Services, commented, “The small size of the issue might work in its favor, though the competition is intense in the NBFC space.” Meanwhile, Akriti Mehrotra from StoxBox highlighted the robust growth in Manba Finance’s assets under management, which have grown at a 37.5% annual rate. This, combined with improved profit margins and reduced net non-performing assets, presents a compelling case for investment.

Manba Finance plans to use the IPO proceeds to bolster its capital base, thereby supporting future growth initiatives. The funds will be essential as the company expands its offerings across various financial products, including loans for two-wheelers, three-wheelers, used cars, and small businesses.

Link Intime India Private Limited is acting as the official registrar for the IPO, while Hem Securities Limited serves as the lead manager. The shares are scheduled for listing on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on September 30, 2024, pending final allotment processes.

Investment analysts from firms like Swastika Investmart and SMIFS recommend subscribing to the IPO with varying degrees of risk considerations. While Swastika Investmart advises a cautious approach, SMIFS suggests a long-term investment perspective. BP Equities also supports a similar outlook, citing the company’s strategic market positioning and fair IPO pricing at a P/BV of 2.3.

Manba Finance, headquartered in Mumbai, specializes in providing financial solutions including electric vehicle financing and personal loans. It has a significant presence across six states in India, operating through 66 locations connected to 29 branches.