Manba Finance IPO: GMP reflects strong demand ahead of opening

The initial public offering (IPO) of non-banking financial company Manba Finance is set to open for subscription on September 23 and will be available for bidding until September 25, 2024. Prior to the IPO launch, the company's shares are trading at a grey market premium (GMP) of ₹60 in the unlisted market.

Based on the upper price band of ₹120, the stock is trading at a significant 50% premium compared to the IPO price. However, grey market premiums only indicate market perception in the unlisted segment and can change quickly.

Manba Finance has set its IPO price range between ₹114 to ₹120 per share. Investors can bid for a minimum lot of 125 equity shares and in multiples of that. The company aims to raise ₹150 crore through the IPO, which consists entirely of a fresh issue of 1.25 crore equity shares, with no offer-for-sale portion.

Around 50% of the issue is allocated for qualified institutional buyers, 35% for retail investors, and 15% for non-institutional investors. The Maharashtra-based company plans to use the IPO proceeds to strengthen its capital base for future needs. Additionally, it raised ₹45.25 crore from eight institutional investors via the anchor book on September 20.

Chartered Finance and Leasing led the anchor book, purchasing 8.33 lakh shares worth ₹10 crore. Other investors, including Finavenue Capital Trust, Antara India Evergreen Fund, Belgrave Investment Fund, Meru Investment Fund, NAV Capital VCC, Rajasthan Global Securities, and Vikas India EIF I Fund, each bought 4.2 lakh shares. Founded in 1998, Manba Finance is an NBFC-BL providing financial services for new two-wheelers, three-wheelers, electric vehicles (EVs), used cars, small business loans, and personal loans.

The company's revenue increased by 44%, while its profit after tax (PAT) surged by 90% between the financial years ending March 31, 2023, and March 31, 2024. Hem Securities Ltd. is the lead manager for the IPO, with Link Intime India Private Ltd. serving as the registrar. The allotment for the IPO is scheduled for September 26, and the stock is expected to be listed on the BSE and NSE around September 30, 2024.

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