Hi Bharath,
Azure managed applications enable you to offer cloud solutions that are easy for consumers to deploy and operate. You implement the infrastructure and provide ongoing support. To make a managed application available to all customers, publish it in the Azure marketplace. To make it available to only users in your organization, publish it to an internal catalog.
A managed application is similar to a solution template in the Marketplace, with one key difference. In a managed application, the resources are deployed to a resource group that's managed by the publisher of the app. The resource group is present in the consumer's subscription, but an identity in the publisher's tenant has access to the resource group. As the publisher, you specify the cost for ongoing support of the solution.
Advantages of managed applications:
Managed applications reduce barriers to consumers using your solutions. They don't need expertise in cloud infrastructure to use your solution. Consumers have limited access to the critical resources, don't need to worry about making a mistake when managing it.
Managed applications enable you to establish an ongoing relationship with your consumers. You define terms for managing the application, and all charges are handled through Azure billing.
Although customers deploy these managed applications in their subscriptions, they don't have to maintain, update, or service them. You can make sure that all customers are using approved versions. Customers don't have to develop application-specific domain knowledge to manage these applications. Customers automatically acquire application updates without the need to worry about troubleshooting and diagnosing issues with the applications.
For IT teams, managed applications enable you to offer pre-approved solutions to users in the organization. You know these solutions are compliant with organizational standards.
Managed Applications support managed identities for Azure resources.
For more information w.r.t Azure managed applications overview, refer this Azure document.