Manba Finance IPO: Key strengths, risks and financials you need to know

Manba Finance IPO: Strengths

• Has a relationship with 1,100 dealers.
• The company can expand to new, underpenetrated geographies, presently operating in 66 locations across six states.
• The company has access to diversified and cost-effective long-term borrowing from pass-through certificates (PTC) and the issuance of privately placed 211-placed unlisted and listed non-convertible debentures (NCDs) along with banks.
• Scalable and technology-driven operating model with faster turn-around time (TAT) for loan processing.
• A three-tier collection system comprising tele-calling, field collection, and legal recovery.
• In FY24, it had gross and net non-performing assets (NPA) of 3.95% and 3.16%, respectively.

Manba Finance IPO: Risks

• Lacks diversity in loan products as loans for new vehicles constitute 97% of its assets under management (AUM).
• Has experienced negative cash flows in FY23 and FY24.
• It faces competition from NBFCs, commercial banks, small finance banks, e-commerce companies, lending platforms, and payment service providers.
• Operates in a seasonal industry, and an economic slump might affect its revenue and liquidity.
• The company is subject to inspections by the Reserve Bank of India (RBI), and non-compliance could result in penalties and restrictions.
• As of the fiscal 2024, first-time buyers constituted 43% of its total disbursement.
• The company may be affected by volatility in interest rates in its treasury operations.

Manba Finance IPO: Financials

Manba Finance offers financial solutions for auto loans, small business loans, used cars, and personal loans.