Manba Finance Ltd, a Non-Banking Finance Company (NBFC), is set to launch its initial public offering (IPO) on 23 September 2024. The company has announced a price band of ₹114 to ₹120 per share, with the issue aiming to raise ₹151 crore. Investors have the opportunity to invest in IPO, which is entirely a fresh issue of up to 1.26 crore shares.
Key details of the IPO
The subscription window for the IPO will remain open until 25 September. Manba Finance, which is headquartered in Maharashtra, currently has 100% of its shares held by its promoters. Following the IPO, this will change as shares will be available to public investors. The proceeds raised from the IPO will be used to strengthen the company’s capital base, primarily to support its future lending activities and general corporate requirements.
Breakdown of the offering
The offering is divided into three categories: 50% of the issue size is reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors. Investors can bid for a minimum of 125 equity shares and in multiples of 125 thereafter, allowing flexibility for different investor groups to participate.
Company's performance and growth
Manba Finance provides a range of financial solutions, including auto loans, used car loans, small business loans, and personal loans. The company has a significant presence in 66 locations in six states: Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh, and Uttar Pradesh.
In terms of financial performance, the company has demonstrated robust growth. Its Assets Under Management (AUM) grew to ₹936.85 crore in FY24, up from ₹495.82 crore in FY22, representing a compound annual growth rate (CAGR) of 37.5%. This impressive growth has been mirrored in the company’s profitability, with its net profit rising by 89.5% to ₹31.41 crore in FY24, compared to ₹16.58 crore in the previous financial year. Revenue also surged 44%, from ₹133.32 crore in FY22 to ₹191.58 crore in FY24.
Purpose of the IPO
Manba Finance plans to use the proceeds from the IPO to boost its capital reserves, which will enable the company to expand its lending capacity and continue offering financial services across its current and potential new markets. The additional capital will allow the NBFC to remain competitive and meet the increasing demand for loans, particularly in the sectors it already operates in, such as used cars and small business loans.
Hem Securities appointed as lead manager
Hem Securities has been appointed as the sole lead manager for the IPO. Their role will involve coordinating the offering and ensuring its smooth execution. With this IPO, Manba Finance aims to position itself more strongly in the market. Meanwhile, they will be providing investors with a compelling opportunity to invest in a company with a track record of strong financial performance.
The upcoming IPO provides a promising opportunity for investors looking to capitalise on the growing financial services sector in India. With the company’s strong financial history and its strategic growth plans, this offering is likely to attract significant interest from institutional and retail investors alike.
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