Manba Finance IPO opens on Monday. What GMP signals ahead of subscription?

The Rs 151 crore initial public offering (IPO) of Mumbai-based non-banking financial company (NBFC) Manba Finance is set to open for public subscription on September 23 and will close on September 25. Ahead of the issue, the grey market premium (GMP) for Manba Finance was around Rs 55-60, suggesting a 46% premium over the issue price.

The price band for the IPO has been fixed at Rs 114-120 a share.

The IPO is entirely a fresh issue of up to 1,25,70,000 shares with no offer-for-sale component. The total size of the Rs 151 crore issue has been calculated based on the price at the upper band.

The company intends to use the proceeds from the fresh issuance to augment its capital base and meet future capital requirements.

The issue will be made through the book-building process, wherein not more than 50% of the issue will be allocated to qualified institutional buyers (QIBs), not less than 15% to non-institutional investors (NIIs), and not less than 35% to retail investors.

Based in Mumbai, the company provides financial solutions to both salaried and self-employed individuals, offering a quick turnaround time (TAT) for loan sanction and disbursement.In fiscal 2024, Manba Finance had one of the highest shares of two-wheeler loans, accounting for 92% of its assets under management (AUM). It also ranked third in AUM per branch at Rs 14.41 crore, behind companies such as Arman Financial, Baid Finserv, Berar Finance, Hero Fincorp, MAS Financial, Muthoot Fincorp, and TVS Credit. Manba Finance also had the fastest branch growth, with a CAGR of 40.3% from FY 2022 to FY 2024.Manba Finance’s AUM increased from Rs 495.82 crore in FY 2022 to Rs 936.85 crore in FY 2024, reflecting a compound annual growth rate (CAGR) of 37.46%.

The company posted a profit of Rs 31.41 crore in FY24, an 89.50% increase from Rs 16.58 crore in the previous year. Revenue for FY24 grew significantly to Rs 191.58 crore from Rs 133.32 crore in FY23, a rise of 43.71%, driven primarily by higher interest income.

Manba Finance will list its equity shares on the BSE and NSE. Hem Securities is the sole book-running lead manager, and Link Intime India is the registrar for the issue.

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