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Manba Finance is a Mumbai based NBFC with a focus on new two wheeler (2W), three wheeler (3W), electric two wheeler (EV2Ws), electric three wheeler (EV3Ws), Used Cars, Small Business Loans and Personal Loans with an AUM size of Rs. 937 Cr as on March 31, 2024. About 87% of the loan portfolio comprises of 2W with presence across 1,100 dealers. Manba intends to deliver robust growth by expanding into new states and also focus on leveraging its existing network to further penetrate the market with its newer products like used cars, SBL and PL.

Details of the Issue:

The public issue consists of Fresh Issue aggregating up to Rs 151 Cr.

Investment Rationale:

* Extensive collections infrastructure and processes leading to maintenance of asset quality

* Good scope for increasing penetration in existing markets and diversifying into new markets

* Diversifying into Used Car, Small Business Loans and Personal Loans

* Established relationships with the dealers

* Higher share of New To Credit customers results in lesser competition

Valuation and Recommendation

Being a NBFC focused on the 2W segment, Manba has managed to deliver strong performance despite a weak rural recovery post covid. Manba witnessed its GNPA peak out in FY22 at 4.9% which is much lower compared to other vehicle financiers. Further on the back of a low base and expansion in new geographies, Manba has been able to grow its AUM at 37% CAGR over FY22-24 and has generated ROA/ROE of 2.3%/10.1% which is in line with other listed vehicle financiers, while its valuation appears attractive at FY24 P/B of 1.7x (post issue). Thus we recommend subscribing to the issue.

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SEBI Registration number is INH000001766