Manba Finance IPO Allotment: A Step-by-Step Guide

Introduction to Manba Finance IPO

Manba Finance is an NBFC based out of Mumbai and has been one of the major players in the financing business area, especially concerning vehicle loans and other financial services. Well diversified with a strong customer base, Manba Finance decided to float its IPO. This step shall strengthen the equity base of the company and expand its scope of operations to meet the increasing business requirements.

The IPO of Manba Finance witnessed mad interest among retail investors as well as the institutional investors. Founded on very primary foundations, that define a track record and profitable growth together with promise times within India’s financial sector, there have been reasons enough for such keen interest.

Important IPO Information:

New issue with an offer-for-sale by existing shareholders: The Manba Finance IPO would comprise fresh shares and shares offered for sale by the existing shareholders. The fresh issue would raise funds for the financing business of the company and future growth. The offer-for-sale would be a means through which the existing shareholders liquidate some fraction of their equity.

The following are the key details of the IPO:

Issue Size:

The size of the fresh equity and the offer-for-sale are together included in the total issue size. The money raised from the fresh equity will be used mainly to accommodate the working capital requirements, repayment of debts, as well as general corporate purposes.

Price Band:

The given price band by the company will be a competitive one allowing retail investor investment and increasing the demand for subscriptions.

Lot Size The number of shares an investor applies to buy in an IPO is usually defined as the lot size. In order to incorporate maximum participation by small investors, the lot size under the retail lot is determined sensibly.

IPO opening date and closing dates:

The IPO window period is usually tiny in days, thus keeping a deadline for applications. Thus, the investors are advised to make the applications during this period because no late applications are considered.

Stock Exchanges:

After the IPO is successful, shares of Manba Finance would be listed on major stock exchanges such as NSE and BSE, thereby creating liquidity and tradeability for the shareholders.

Objectives of the Manba Finance IPO are as follows:

Capital Augmentation:

The company aims at raising fresh capital that would fuel its loan book expansion, strengthen its balance sheet, and provide for future business needs.

Debt Repayment:

A portion of the proceeds from fresh issue will be used towards repayment of borrowings already existing in the books, thus improving financial leverage of the company and reducing the cost of interest.

Increased Brand Visibility:

Public listing increases market visibility and enhances recognition of the company. This therefore boosts the allure of the business to potential clients, partners, and investors into the business.

Shareholder Liquidation:

The sell-off mechanism in an offer-for-sale feature enables early investors, promoters, or critical shareholding to liquidate some portion of their holding and realize profits from such liquidation.

Manba Finance Business Model and Growth Strategy

Manba Finance has emerged as the face trusted in financing two-wheelers and car loan services. With branches spread out hugely all over the country, and with strong relationships with dealerships, it is well-equipped to gather semi-urban and rural customers. It also generates diversified income with other financial products such as personal loans and SME loans.

The expansion strategy at Manba Finance is based on:

Deepen geographical footprint in Tier 2 and Tier 3 cities, where demand for vehicle loans is increasing

Technological Advancement:

The company would invest in technology to bring more digitization to the business, easier loan disbursals, and improved customer experience.

Product Diversification:

Manba Finance is exploring new lending segments to cater to a wider customer base and reduce dependence on a single product line.

IPO Allotment Process

The IPO allotment process is no more than the process whereby those applicants are offered shares at the IPO price, following the application process conducted during the subscription window. Since Manba Finance’s IPO is going to be highly oversubscribed-that is, where there are more applicants than shares available-it is going to be a lottery for the retail investors and proportionate for the institutional investors.

Details of IPO Allotment Process:

Here is how the IPO allotment process goes, which is categorized into three various investor categories as described below.

Investor Categories:

The IPO gets to be divided into three kinds for allotment. Each division of investors is given its per centage of shares on offer as described below. Retail Investor Quota: The majority share of the IPO goes to retail investors. Their allotment is always carried out strictly on the demand in that category.

Oversubscription Scenario:

In the case of oversubscription, allotment for retail investors takes place through lottery or by lot, while institutional investors get shares on a proportionate basis as per the amount applied.

Refund and Unblocking of Funds: The process is smooth, and all this is done electronically through banking itself. If the applicant cannot get shares, his application money will be refunded or unblocked in the bank account.

Check Status of IPO Allotment

After the finalization of the allotment of an IPO, there are different processes through which an investor can check his application status. Here’s how you can do it.

Registrar’s website:

The registrar maintains a book of applications and records of allotment. Applicants can check their IPO status by logging into the website of the registrar using application number or PAN details.

Investor can check the allotment status on both BSE and NSE websites after submitting the information.

SMS/Email Intimation:

Investors will also be communicated their allotted status through SMS and/or Email, provided the investors have opted for such a communication at the time of applying.

Listing and Post-IPO Performance

After the allotment of the shares, Manba Finance would be listed on the stock market. The listing price of the stock would depend on the market’s demand and the prevailing mood of the investors along with the general situation in the market as prevalent on the date of the listing. Investors and analysts of the market will keenly keep an eye on the post-listing performance of Manba Finance’s stock so as to judge how welcome such stock has been in the market.

The firm’s strong fundamentals build optimism regarding the prospects of returns for shareholders in the medium to long term, considering its robust financial performance, good management, and excellent plans toward sustainable growth.

Risks from the IPO

While Manba Finance has said that it is growing steadily, there are risks as can be seen from the following point. Key risks include:

Credit Risk:

Since Manba Finance has lending business, the company is exposed to credit risk-exposed to being defaulted by the borrowing fraternity, especially in an economic slowdown.

Competition:

The space for NBFC in India is quite competitive with a large number of players in the market. Competition will further impact the profitability of the company.

Regulatory Changes:

In case any change in regulations applicable to the financial sector or NBFCs, the operations and profitability of the company may be impacted.

Manba Finance IPO is an investment prospect that would interest anyone looking for investment in the growth story of India’s financial sector. The company has a clear growth strategy, strong market presence, and intends to utilize the proceeds from the IPO effectively, presenting an excellent position to deliver long-term value to the shareholders. As with any investment, due diligence must be done upon establishing risks and making a decision.