Abans Holdings Limited IPO Details
Abans Holdings Limited is a multinational corporation with operations in a variety of industries, including investment management, trading, broking, gold refining, non-bank financial services, agricultural trading, pharmaceutical distribution, software development, and real estate development. As a division of the Abans Group, they provide financial services.
NBFC Business services, Agency Business services, Capital, and other Business services are offered to clients by Abans Holdings. The services include commodity trading, foreign currency, stock broking, depositary services, asset management, investment advisory services, and wealth management for private traders and other small and medium firms. They are an NBFC with RBI registration (Non-Deposit taking). It currently has active businesses across six countries including UK, Singapore, UAE, China, Mauritius, and India.
The firm operates a variety of financial services operations, including:
Financial Services: The primary goal of this RBI-registered NBFC (Non-Deposit Taking) is to lend to private traders and other small and medium-sized companies operating in the commodities trading sector.
Agency Business: It is a SEBI registered Stock and Commodity Exchange Brokers with memberships in all the major stock exchanges in India and an FCA registered financial services firm in London. It provides a range of institutional and noninstitutional trading services, wealth management, and private client brokerage services, primarily in the areas of equity, commodities, and foreign exchange.
Capital and other Business: The internal treasury activities that oversee the extra capital funds are part of the capital business.
Objective of the Issue
It is proposed that the Issue’s net proceeds be used as follows:
- Further Investment in the NBFC Subsidiary (Abans Finance Pvt. Ltd.) for financing the augmentation of its capital base to meet its future capital requirements
- General Corporate purposes.
| Abans Holdings Limited IPO | Details |
|---|---|
| Price Band | ₹ 256 to ₹ 270 per share |
| Face Value | ₹ 2 per share |
| Issue Size | 345.60 Crs |
| Opening Date | 12 Dec 2022 |
| Closing Date | 15 Dec 2022 |
| Allotment | 20 Dec 2022 |
| Initiation of Funds | 21 Dec 2022 |
| Credit to Demat | 22 Dec 2022 |
| Listing Date | 23 Dec 2022 |
| Pre Issue Share Holding | 97.42% |
| Post Issue Share Holding | 72.09% |
| 1 lot | 55 Shares |
| Retail Quota | 60% |
| QIB Quota | 10% |
| NII Quota | 30% |
| Retail (Min) | 1 Lot (55 Shares) |
| Retail (Max) | 13 Lots (715 Shares) |
| S-HNI (Min) | 14 Lots (770 Shares) |
| B-HNI (Min) | 68 Lots (3740 Shares) |
| Promoters | Abhishek Bansal |
| Draft Red Herring Prospectus | DRHP |
| Red Herring Prospectus | RHP |
| Grey Market Premium | Click Here |
| Allotment Status | Check Here |
The IPO for Abans Holdings is scheduled to begin on December 12 and end on December 15. The Abans Holdings IPO will consist of a fresh issue of 3,800,000 equity shares and an offer to sell up to 9,000,000 equity shares at a price of two apiece in order to raise about 346 crores. 60% of the quota is for retail, 10% is for QIB, and 30% is for NII.
EBITDA & PAT (in Crs)
EBITDA– Earnings Before Interest Tax Depreciation & Amortization PAT – Profit After Tax
Total Assets, Share Capital and Borrowings (in Crs)
Revenue Growth (in Crs)
Peer Comparison
| Particulars | Abans Holdings Limited | Edelweiss Financial Services Ltd. | Geojit Financial Services Ltd. | Choice International Ltd. |
|---|---|---|---|---|
| Face Value | 2 | 1 | 1 | 10 |
| EPS | 13.37 | 2.11 | 6.31 | 13.84 |
| PE | 20.19 (taking 270 as the listing price) | 27.44 | 7.28 | 19.44 |
| RoNW% | 18.15 | 9.68 | 24.76 | 26.46 |
| Revenue from Operations (in ₹ Crs) | 284.90 | 6911.40 | 480.79 | 285.95 |
| EBITDA Margin (%) | 11.29 | 48.65 | 45.73 | 32.29 |
| PAT Margin (%) | 10.44 | 3.07 | 29.74 | 18.75 |
| ROE | 9.13 | 2.77 | 20.05 | 26.41 |
| Debt to Earnings Ratio | 0.12 | 2.79 | 0.06 | 0.52 |
Analysis:
If we analyse the financial parameters of Abans Holdings Limited, then it can be clearly seen that the EBITDA is almost constant from past 3 years but PAT is increasing on year to year basis. Total assets of the company in comparison to its borrowings are more but total assets are constant and we can see no growth from past 3 years. Now, the firm’s revenue growth is constantly decreasing on YoY basis. Firms’s borrowings are decreasing and therefore, there is increase in profit due to less payment of interest.
Taking the EPS as 13.37 as per RHP, PE ratio is 20.19. However, if we compare with other firms then the PE ratio of Abans Holdings Limited in just next to Edelweiss Financial Service Limited. Even if we take another peer company Geojit Financial Services Limited which has a PE Ratio of 7.28 and PAT margin of 29.74% which is higher than Abans Holdings Limited PAT margin of 11.29%. Based on these calculations it simply means that the valuations are on a higher side.
RoNW of 18.15% & EBITDA margin of 11.72% as per RHP, are second lowest in comparison to its peer companies. But if you compare its own Pat Margin growth then it is on the growth path and it can be confirmed by checking the revenue from operations which is also steadily increasing on YOY basis. If we check the the PAT in four months from April – July 2022, it can be seen that the profit earned in the first quarter is almost equal to 200 crores which is just 80 crores less than the profit earned in the whole FY 2022. This depicts that the company is on the high growth path.
ROE of 9.13 till FY 2022 as per RHP, is just above the Edelweiss Financial Services Limited. However, the low debt to earnings ratio of 0.12 is second in the list.
So, there are some factors like decresing revenue growth, constant earnings and total assets which do not indicate any growth in the company but at the same time the profit margin is increasing on YoY basis. Increasing profit margin can be due to decreased borrowings and cannot be taken as a positive to overcome the factors mentioned above. So, its better to stay away from this IPO as there are better listed firms of the same segment in the market.