IPO listed on 30 Sep'24
Manba Finance Ltd
Minimum Investment
₹ 15,000 / 125 shares
Grey market premium
₹ 40 (33% premium)
Issue price
₹ 120
Listing price
₹ 145
Listing day %
27%
Listing on
Sep 30, 2024
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- Manba Finance Ltd (MFL) has seen a significant improvement in its recent financials. However, future success depends on effectively scaling its new product lines, expanding its loan book, and maintaining asset quality.
- The firm’s funding costs are higher than its peers due to a lower credit rating (BBB+ by Care ratings) and a moderately high proportion of fixed-cost borrowings (66%).
- The IPO is set at a price-to-earnings (P/E) ratio of 14x based on FY24 earnings. Compared to other mid-sized and larger NBFCs, which offer more diversified portfolios, the IPO's valuation appears less favourable.
- Given the modest scale and regional focus of its operations, a moderately diverse product line-up with significant exposure to small, economically vulnerable borrowers, and an average funding profile, long-term investors may find better opportunities elsewhere in this sector.
- Nevertheless, with a 50% grey market premium and the current euphoria around recent IPOs, those willing to take on more risk might consider subscribing to the IPO for potential listing gains.
About the company
Founded in
31 May'96
Managing director
Manish Shah
- MFL is a non-banking financial company (NBFC) that has been operational for over 30 years. It primarily provides two-wheeler loans to both salaried and self-employed individuals, with an average loan amount of Rs 80,000.
- The firm has expanded its portfolio to include loans for used cars, electric three-wheelers, small businesses, and personal loans. It now aims to penetrate new markets to expand its loan book on a sustainable basis across various credit cycles.
STRENGTHS
- Strong Financial Growth: MFL has exhibited a robust growth trajectory, with its interest income and net profit posting compounded annual growth rates (CAGRs) of 34% and 80%, respectively, from FY22 to FY24.
- Robust Growth in AUM: Over the past three years, MFL’s Assets Under Management (AUM) have grown at an impressive CAGR of 37%, reaching Rs 936.85 crore by FY24.
RISK FACTORS
- Rising NPAs: MFL's net NPAs have slightly increased to 3.16% in FY24 from 3.14% in FY23, and its gross NPAs of 4% are higher than those of its peers.
- Cash Flow Issues: Over the past two years, MFL has experienced negative cash flows from operating activities. Persistent negative cash flows could jeopardize its ability to fulfil cash requirements, potentially affecting its operational effectiveness and growth plans.
- Geographic Concentration: MFL’s operations are mainly concentrated in six states across western, central, and northern India, with Maharashtra alone contributing to 65% of its total AUM. Any adverse developments in these regions could negatively impact its operational and financial results.
- Limited Scale of Operations: MFL operates on a small scale with a moderately seasoned and concentrated product range; new vehicle loans constitute 98% of the total loan book, targeting primarily small and economically vulnerable borrowers.
- Intense Market Competition: MFL faces increasing competition in the low-ticket financing sector, not only from large, established players with nationwide coverage such as Mahindra Finance and Shriram Finance but also from small finance banks and lending platforms.
- Legal Concerns: MFL is involved in certain legal disputes, involving its promoters and directors. Any unfavourable outcomes from these legal issues could damage its reputation and financial health.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 150.84 crore
Fresh Issue
₹ 150.84 crore
OFS
₹ -
Price range
₹ 114 - 120
Lot size
125 shares
Issue Objective
MFL intends to use the proceeds from the fresh issue to augment its capital base, which will cater to future capital requirements.
Dates
Bidding open
23 Sep'24
Bidding close
25 Sep'24
Allotment date
26 Sep'24
Refund date
27 Sep'24
Listing
30 Sep'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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