Manba Finance Limited, a leading Non-Banking Financial Company (NBFC) in auto loans, used cars, small business loans, and personal loans, has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), marking a step towards raising funds through an Initial Public Offering (IPO).
Expansion Plans Through IPO
The upcoming initial public offering (IPO) of shares, each valued at Rs 10, will only include new shares, with no existing ones being sold. Around 12.57 million new shares will be available. The IPO will work through a process called book-building.
Here is how the shares will be distributed: up to 50 percent will go to big institutional buyers, at least 15 percent to smaller investors, and a minimum of 35 percent to individual buyers.
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Utilization of Funds
Proceeds from the IPO's fresh issuance will be used towards strengthening the company's capital base to support its future lending activities and meet general corporate requirements.
Company Background
Established in 1998 as an NBFC in Mumbai, Maharashtra, Manba Finance has expanded its operations over the years. Currently, it operates across 65 locations spanning Maharashtra, Gujarat, Rajasthan, Chhattisgarh, and Madhya Pradesh, primarily catering to salaried and self-employed individuals.
Manba Finance's loan portfolio comprises new vehicle loans, constituting approximately 99 per cent of its assets under management (AUM). With an average ticket size of around Rs 0.80 lakhs, the company provides loan approvals and disbursements. It maintains relationships with over 850 dealers, including more than 60 electric vehicle (EV) dealers.
Financial Highlights
According to a CRISIL report, Manba Finance has reported a positive performance. In fiscal 2023, Manba Finance reported the highest share of two-wheeler loans as a percentage of its Assets Under Management (AUM). With a Return on Assets (RoA) of 2.2 per cent and a credit cost of just 0.7 per cents. Moreover, the company managed its loan portfolio, maintaining a Gross Non-Performing Asset (GNPA) ratio of 3.7 per cent throughout the fiscal year.
Revenue and Profit Growth
In FY23, Manba Finance reported a profit of Rs 16.58 crore, an increase from the previous year. The company revenue surged to Rs 133.32 crore. During the six-month period ending on September 30, 2023, the revenue generated from operations amounted to Rs 88.29 crore, resulting in a profit after tax of Rs 16.80 crore.
