Manba Finance listing

Manba Finance Listing: Shares Hit 5% Upper Circuit After Debut at ₹145 on NSE

Manba Finance, a non-banking financial company (NBFC), debuted its shares on September 30, marking a significant milestone in its stock market journey. Below is a detailed breakdown of the IPO listing:

1. Listing Performance and Debut

• Initial Price: Manba Finance shares debuted on the NSE at ₹145 per share, a 20.8% increase over the issue price of ₹120. On the BSE, the stock listed at ₹150 per share, representing a 25% premium.
• Upper Circuit: Following its listing, the shares quickly hit a 5% upper circuit on both exchanges. As of 10:15 am, shares traded at ₹152.25 on the NSE, up 5% from the opening price.
• Trading Stats (as of 10:30 am):
  • Traded Volume: 38.17 lakh shares
  • Traded Value: ₹56.15 crore
  • Market Capitalization: ₹764.90 crore

2. Manba Finance IPO Details

• IPO Size: The total issue size of the IPO was ₹150.84 crore, raised entirely through a fresh issue of shares.
• Objective: The funds from the IPO will be utilized to bolster Manba Finance’s capital base to meet future capital requirements.

3. Manba Finance Key Strengths

• Extensive Dealer Network: Manba Finance has a network of 1,100 dealers, allowing the company to use these dealers as sales points for their loans.
• Loan Portfolio: As of FY24, about 98% of Manba Finance’s loan portfolio consisted of new vehicle loans, including two-wheelers, three-wheelers, and electric vehicles.
• Technology-Driven Model: The company’s operational efficiency is supported by technology, enabling quick loan processing.
• Expansion Potential: Manba Finance has room to grow in underpenetrated markets and is already operational in 66 locations across six Indian states.
• Low NPAs: Gross and net NPAs stood at 3.95% and 3.16%, respectively, in FY24, reflecting relatively low levels of non-performing assets.

4. Investor Response

The IPO was oversubscribed 224 times, indicating strong demand from institutional and retail investors. The non-institutional investors (NII) category saw the IPO booked 511 times, while the retail portion was subscribed 143.9 times.

5. About Manba Finance

Incorporated in 1996, Manba Finance Limited focuses primarily on financing vehicle purchases, including two-wheelers, electric vehicles, and used cars. The company also offers personal loans and small business loans, targeting salaried and self-employed individuals. As of FY24, its assets under management (AUM) totaled ₹936 crore.

Advantages of Manba Finance Listing

1. Strong Market Debut: Listing at a 20.8% premium on NSE and 25% on BSE reflects robust investor confidence.
2. Investor Demand: Oversubscription, especially by NIIs and retail investors, highlights the popularity of the stock.
3. Technology-Driven Model: Quick turnaround time for loan processing is a competitive advantage in the lending space.
4. Geographic Reach: Presence in 66 locations across six states allows for further expansion into underpenetrated markets.
5. Established Dealer Network: The large network of dealers supports the company’s business model by serving as sales points for loans.

Disadvantages of Manba Finance Listing

1. NPA Concerns: Though the NPAs are relatively low, the gross NPA of 3.95% could still pose a risk if not managed effectively.
2. Concentration in Vehicle Loans: With 98% of its loan portfolio focused on vehicles, especially two- and three-wheelers, the company’s revenue is heavily dependent on the auto sector, which can be volatile.
3. Competitive Market: As an NBFC, Manba Finance faces competition from other financial institutions, banks, and fintech companies offering similar loan products.
4. Limited Loan Ticket Size: The average ticket size for two-wheelers and three-wheelers is relatively low, which could restrict revenue growth if not diversified into higher-ticket loans.

Conclusion

The Manba Finance listing marks a successful stock market debut, driven by high investor interest and strong demand. The company’s well-established dealer network, presence in underpenetrated geographies, and technology-driven operating model provide significant growth potential. However, the concentration in vehicle loans and competition in the NBFC space remain challenges. Overall, the IPO outcome is promising, with shares performing well on the market.

FAQs

1. What was the issue price of Manba Finance shares?

1. • The issue price of Manba Finance shares was ₹120 per share.

2. At what price did Manba Finance shares list on the NSE and BSE?

1. • On the NSE, the shares listed at ₹145 per share (20.8% premium), and on the BSE, they listed at ₹150 per share (25% premium).

3. What is the total IPO size of Manba Finance?

1. • The total IPO size is ₹150.84 crore, raised entirely through fresh issue.

4. How much was the IPO oversubscribed?

1. • The IPO was oversubscribed by 224 times, with the NII category booked 511 times and the retail category 143.9 times.

5. What will the IPO funds be used for?

1. • The funds will be used to augment Manba Finance’s capital base and meet future capital requirements.

6. What is Manba Finance’s loan portfolio focused on?

1. • Nearly 98% of the loan portfolio is focused on new vehicle loans, including two-wheelers, three-wheelers, and electric vehicles.

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