Manba Finance made a solid debut on the Bombay Stock Exchange (BSE), listing at a 25% premium over its initial public offering (IPO) price. The company's shares were listed at Rs 150 on BSE, compared to the IPO price of Rs 120 per share. On the National Stock Exchange (NSE), the stock opened at Rs 145, reflecting a 20.83% premium.
While the listing is impressive, it fell short of pre-listing expectations. The grey market premium (GMP) was estimated at Rs 38-40, suggesting potential gains of up to 35%, but the actual listing premium was somewhat lower.
Hold or Sell: What Should Investors Do?
The IPO was managed by Hem Securities as the lead book runner, with Link Intime India as the registrar. The overwhelming demand and subscription rates reflect investor confidence in Manba Finance's business model and future prospects. The company specializes in financing two-wheelers, three-wheelers, electric vehicles, and used cars, which aligns well with growing market trends, especially in emerging markets where affordable mobility solutions are in high demand.
Manba Finance's focus on personal mobility solutions is well-timed, as urbanization rises and more consumers seek financing options for small vehicles. As the market for two- and three-wheelers grows, particularly in India and other emerging economies, the company is well-positioned to capitalize on these opportunities.
However, investors should proceed with caution. According to Shivani Nyati, Head of Wealth at Swastika Investmart Ltd., “The listing gain is commendable, but investors should remain cautious as the IPO was fully priced and the company operates in a competitive market with inherent risks.” She further advised that existing investors should hold their shares with a stop loss around Rs 130 while keeping a close eye on the company’s performance and market trends.
Although the stock had a strong debut, analysts suggest that investors evaluate the competitive landscape, which includes many other players in the non-banking financial services (NBFC) sector. As the competition grows, Manba Finance may face challenges that could impact its long-term performance.
Manba Finance IPO Details
The IPO, which was open for subscription from September 23 to September 25, was priced in the band of Rs 114-120 per share. The total size of the offering was 1.26 crore fresh shares, raising approximately Rs 150.84 crore.
The response to the IPO was overwhelming, with a subscription rate of 224.10 times. Non-institutional investors led the charge, with subscriptions 511.65 times the offering. Qualified institutional buyers (QIBs) and retail investors also showed strong interest, with subscription rates of 148.55 times and 144.03 times, respectively.
About Manba Finance
Founded in 1998, Manba Finance operates as a non-banking financial company (NBFC) and is focused on providing financing for vehicles, including two-wheelers, three-wheelers, electric vehicles, used cars, and personal loans. The company’s niche focus on these segments has allowed it to carve out a unique position in a highly competitive market.
As urbanization and demand for affordable transportation continue to rise, Manba Finance is well-positioned for future growth. However, as the company operates in a highly competitive environment, investors should carefully monitor market dynamics and broader economic factors that could influence the company's growth prospects.
Hold or Sell?
While the listing gains are notable, long-term investors need to weigh the company's potential against market competition and risks. With a strong focus on niche vehicle financing, Manba Finance has a solid business model, but the competitive NBFC landscape requires ongoing assessment. Investors are advised to hold their positions with caution, setting a stop loss at Rs 130 and tracking the company's financial performance and market conditions before making any decisions.
In summary, Manba Finance’s debut on the stock market was successful but not without cautionary signs. While it holds growth potential, investors must evaluate their risk appetite and stay informed about future developments in both the company and the broader financial landscape.