Manba Finance IPO: Key Details and Investor Insights for 2024

Manba FInance IPO: The much-anticipated Manba Finance Limited IPO is set to launch on 23rd September 2024, aiming to raise ₹150.84 crore through a fresh issue of shares. The Non-Banking Financial Company (NBFC) has garnered significant attention, especially in the grey market, where its shares are currently trading at a premium of ₹60.

Key Details of the Manba Finance IPO

1. Manba Finance IPO GMP Today: According to market observers, shares are available at a premium of ₹60 in the grey market.
2. Manba Finance IPO Price: The price band for this IPO has been fixed at ₹114 to ₹120 per equity share.
3. IPO Dates: The IPO will be open for bidding from 23rd to 25th September 2024.
4. IPO Size: The public issue aims to raise ₹150.84 crore entirely through fresh equity shares.
5. Lot Size: Investors can bid for one lot comprising 125 shares.
6. Allotment and Listing Dates: The allotment of shares is likely to take place on 26th September 2024, with listing expected on 30th September 2024 on both BSE and NSE.
7. IPO Registrar: Link Intime India Private Limited has been appointed as the official registrar for this IPO.
8. Lead Manager: Hem Securities Limited will act as the lead manager for the issue.

Financial Insights and Concerns

With Assets Under Management (AUM) of ₹936 crore as of March 31, 2024, Manba Finance has a strong focus on vehicle loans, particularly two-wheelers, which account for 60% of its portfolio and 90% of its revenue. While the company’s niche market yields impressive returns—an average of 21% annually—there are concerns over the sustainability of such high yields in the long term.

Anshul Jain, Head of Research at Lakshmishree Investment and Securities, cautioned, “The company’s growth in FY24 was largely driven by a one-time gain from asset recovery, masking underlying financial vulnerabilities.” The company’s credit rating of BBB+ and a valuation of 1.7x post-money book value have raised concerns about potential risks outweighing long-term gains.

View of the Global Market

The Manba Finance IPO comes at a time of fluctuating global financial markets. Rising interest rates in key economies such as the US and the Eurozone have increased borrowing costs globally, placing pressure on non-banking financial companies (NBFCs) like Manba Finance, which rely on raising funds from both domestic and international sources. As inflationary concerns persist in many economies, companies focusing on niche markets like vehicle financing may face increasing challenges.

Impact of the Fed Rate Cut on the Indian Market

The recent US Federal Reserve rate cut has injected optimism into the Indian financial market, including the NBFC sector. Lower borrowing costs globally may ease liquidity pressures for Indian companies, potentially leading to a positive outlook for the Manba Finance IPO. Additionally, lower global interest rates could boost investor sentiment, driving demand for IPOs in India. However, experts caution that local economic conditions and the NBFC’s specific challenges remain key factors in the IPO’s long-term success.

Should You Apply for Manba Finance IPO

SME IPO marketing is already heated up, Everyone’s tryna double their money. Ola Electric, Bajaj Housing Finance, and PN Gadgil have already doubled investors’ money. Some on listing others after listing like OLA Electric.

New-age companies are making headlines as Mutual funds and FIIs are investing heavily in these companies. Manba constitutes these New age companies but are Mutual funds & FIIs really gonna invest in these?

I would say search for good companies with long-term perspectives to invest in. Bajaj Housing finance was good, OLA Electric was good, NTPC Green, SJVN Green, and HDB financials are some upcoming good IPOs. Don’t gamble in these SME IPO markets.

Conclusion

The last Call must be yours invest wisely. Focus on the long-term investment as the market is already heated up and any small consolidation might make big losses.

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