Manba Finance Limited IPO review - Apply or avoid? Expected Listing Gains? | Vibhor Varshney #ipo

Vibhor Varshney

19 Sept 202417:49

Summary

TLDRThe script discusses the upcoming IPO of a non-banking finance company, Manova Finance. It highlights the company's focus on retail finance for mid-class customers, targeting loans for electric three-wheelers, used cars, and small businesses. The speaker analyzes the IPO details, including the issue price, lot size, and subscription dates, emphasizing the company's growth potential and financial performance. They also discuss the risks, such as high non-performing assets, and provide advice on applying for the IPO, suggesting the possibility of over-subscription.

Takeaways

😀 The script is a financial analysis of an upcoming IPO named 'Manba', which is a non-banking finance company focusing on providing loans.
💼 Manba Finance is targeting the retail segment, specifically middle-class customers, with a major focus on two-wheeler loans, including electric vehicles, used cars, and small business loans.
📈 The company has shown aggressive growth in loan disbursal, with assets under management increasing from 560 crores to 970 crores.
📊 The financials show a revenue jump from 100 crores to 190 crores in two years, with profits after tax also doubling during the same period.
📉 The script discusses the company's non-performing assets (NPAs) and how they have been managed, showing a stable and slightly decreasing trend.
💹 The IPO is entirely a fresh issue, with no offer for sale component, meaning all the funds raised will go directly to the company.
📅 The IPO is scheduled to open on 23rd September and close on 25th September, with the listing expected on 30th September.
💰 The price band for the IPO is set at ₹10, with a face value of ₹10 per share, and the company is aiming to raise 50 crores through the IPO.
🏢 The company's operations are primarily focused in North and West India, with a significant presence in states like Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh.
📝 The script also mentions the importance of using platforms like 'IPO Extra' for comprehensive IPO information and updates.

Q & A

What does 'मनबा लागे' mean in the context of the script?
-In the context of the script, 'मनबा लागे' seems to be a phrase used to grab attention or indicate the introduction of a new topic, possibly related to a company named 'Manba' that is coming with an IPO.
What is the primary concern for investors regarding finance companies' IPOs according to the script?
-The primary concern for investors regarding finance companies' IPOs, as mentioned in the script, is understanding how much the company will raise through the IPO, how much money they will give out, and how much they will not return.
What is the significance of the term 'एनपीए' in the script?
-The term 'एनपीए' refers to 'Net Profit After Tax' in Hindi, which is a significant financial metric for investors to consider when evaluating a company's IPO.
What does the script suggest about the performance of previous IPOs in the market?
-The script suggests that previous IPOs, such as Bajaj Housing Finance, created a buzz in the market, and there was a focus on a few IPOs bundled together, which performed well.
What is the business model of Manba Finance as described in the script?
-Manba Finance, as described in the script, is a non-banking finance company that primarily provides loans without accepting deposits. They raise capital through IPOs, bonds, debentures, or at lower rates and then lend at higher rates, keeping the profit margin.
What are the target customers for Manba Finance's loans according to the script?
-The script indicates that Manba Finance targets retail customers, specifically middle-class individuals, two-wheeler loans, electric three-wheelers, used cars, small business loans, and personal loans.
What is the script's advice regarding the IPO allotment and listing dates for Manba Finance?
-The script advises that the IPO will be available from the 23rd to the 25th, with allotment on the 26th, refunds and share dispatch on the 27th, and listing on the 30th of September.
What is the strategy suggested in the script for applying to the Manba Finance IPO?
-The script suggests applying during the IPO dates, focusing on the retail category, and being prepared for oversubscription, which might lead to a listing gain.
What is the script's perspective on the financial health of Manba Finance?
-The script provides a detailed analysis of Manba Finance's financial health, highlighting increasing assets, revenue growth, and profit after tax. It also discusses the company's aggressive lending and the stability of its non-performing assets ratio.
What is the script's recommendation for investors considering the Manba Finance IPO?
-The script recommends that investors should definitely apply for the Manba Finance IPO, considering the company's growth, financial performance, and the positive aspects highlighted in the analysis.

Outlines

00:00

🌟 IPO Analysis of Manba Finance

The speaker introduces Manba Finance, a non-banking finance company preparing for an IPO. They discuss the general concerns investors have regarding IPOs, such as the amount of money the company will raise and how much return is expected. The focus is on the company's background, its operations in providing loans without accepting deposits, and its target market, which includes two-wheeler financing, electric vehicles, used cars, and small business and personal loans. The speaker also touches on the company's financial stability and growth, emphasizing its retail focus and mid-class market targeting.

05:02

📈 Market Volatility and IPO Performance

The speaker discusses the impact of market volatility on IPOs, citing examples of previous IPOs and their performance. They mention how market fluctuations can affect investor confidence and the success of an IPO. The conversation also includes details about the company's financial assets, revenue growth, and profit margins. The speaker provides an in-depth analysis of the company's financial health, including its reserves and non-performing assets, and compares these figures to industry standards and past performance.

10:05

💼 Detailed Financial Metrics and Company Performance

This section delves deeper into the company's financial metrics, including asset growth, revenue, and profit progression over the years. The speaker highlights the company's return on equity and price-to-book value, which are crucial for potential investors. They also discuss the company's capital requirements and how it plans to use the funds raised from the IPO. The analysis includes a comparison of the company's financial ratios with industry norms, indicating areas of strength and potential concern.

15:08

🚀 Growth Prospects and Investment Strategy

The final paragraph focuses on the company's growth prospects and the investment strategy for the IPO. The speaker outlines the company's goals with the IPO, emphasizing its modest capital requirement and the potential for high returns. They also discuss the company's plans for future expansion and how it intends to maintain its competitive edge in the market. The speaker concludes with a recommendation for investors, suggesting that the IPO is worth considering due to the company's positive financial trajectory and growth potential.

Mindmap

Keywords

💡IPO

An Initial Public Offering (IPO) refers to the first sale of stock by a company to the public. In the context of the video, the speaker discusses an upcoming IPO of a company named 'Manba', which is a non-banking finance company. The IPO is a significant event as it allows the company to raise capital by offering its shares to the public, and it's a topic of interest for potential investors who are looking for opportunities to invest in new market entrants.

💡Non-Banking Finance Company (NBFC)

A Non-Banking Finance Company (NBFC) is a firm that provides various financial services without being a traditional bank. In the video, the company 'Manba' is described as an NBFC, which means it primarily deals with lending activities rather than accepting deposits. NBFCs often focus on niche markets or specific financial products that traditional banks might not cover, making them an interesting sector for investment.

💡Oversubscription

Oversubscription in the context of an IPO means that the demand for shares from the public exceeds the supply of shares offered by the company. The speaker in the video mentions the possibility of the 'Manba' IPO being oversubscribed, indicating high investor interest. This is a positive sign for the company as it reflects strong market confidence and can lead to a successful listing on the stock exchange.

💡Debt

Debt in a financial context refers to an obligation that arises when one party receives credit from another. In the video, the term is used to discuss the financial products offered by 'Manba', which include lending to individuals and businesses. Understanding the company's debt management and lending practices is crucial for investors to assess the financial health and profitability of the company.

💡Equity

Equity refers to the ownership interest in a company. When discussing the IPO, the video mentions equity in the context of the company raising capital by issuing new shares. Equity financing allows companies to expand their business without incurring debt, and it's an important consideration for investors who are looking to buy shares in an IPO.

💡Gross NPA

Gross Non-Performing Assets (NPA) are loans or advances that are due for payment but have not been serviced or repaid by the borrower and are not in good standing. The video discusses the financial health of 'Manba' by mentioning its Gross NPA, which is an indicator of the company's ability to recover its loans. A high Gross NPA ratio could be a red flag for potential investors as it suggests increased risk of financial loss.

💡Net NPA

Net NPA is calculated by subtracting the provisions made against the bad loans from the Gross NPA. It indicates the actual value of non-performing assets that a bank or NBFC has to bear. In the video, the speaker analyzes the Net NPA to understand the financial stability of 'Manba', as a lower Net NPA is generally healthier for the company's balance sheet.

💡Margins

Margins in finance can refer to the difference between the interest charged on loans and the interest paid on deposits, or the profit margin of a company. The video discusses the margins in the context of 'Manba's financial performance, indicating how the company's profitability has increased over the years, which is a positive sign for potential investors.

💡Retail Investors

Retail investors are individual investors who invest in financial assets like stocks, bonds, and mutual funds for their personal accounts. The video script mentions retail investors in the context of the IPO, emphasizing the importance of this group in the subscription and success of the IPO. Retail investors often seek opportunities in new IPOs for potential high returns.

💡Listing Gain

Listing Gain refers to the profit an investor makes when the shares they bought in an IPO increase in value on the first day of trading. The speaker in the video anticipates a positive listing gain for the 'Manba' IPO, suggesting that the market price of the shares on the first day of listing might be higher than the issue price, offering a quick return for investors who manage to subscribe to the IPO.

Highlights

Introduction of a new company named Manba Manba Finances preparing for an IPO.

The company is a non-banking finance company focusing on providing loans.

Manba Manba Finances is raising funds through an IPO, aiming to collect 50 crore rupees.

The funds collected will be used for business expansion and not for any debt repayment.

The company's focus is on retail finance, targeting middle-class customers.

Manba Manba Finances offers financial solutions for two-wheeler loans, electric two-wheelers, used cars, and small business loans.

The company has a significant presence in states like Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh.

The IPO is expected to be oversubscribed, with a focus on the retail category.

The company's financials show a steady increase in assets and revenue.

Profit after tax has doubled in the last two years, indicating strong financial performance.

The company's net profit margin has improved, showing better profitability.

Manba Manba Finances has a low non-performing asset ratio, which is a positive sign for the company's financial health.

The company's return on equity is good, indicating efficient use of shareholder's funds.

The price-to-book value is 2.25, which is considered reasonable for an IPO.

The company is seeking to raise funds through the IPO without any dilution of existing equity.

The IPO is expected to list at a premium, with a potential listing gain.

The company's aggressive loan disbursal strategy has led to an increase in assets under management.

The IPO analysis suggests that the company is targeting a specific regional market with a focused approach.

The video provides a detailed analysis of the company's financials and the potential of the IPO.