Abans Holdings IPO Details and Review – Should you invest or avoid?

Mumbai based Abans Holdings is coming up with an IPO that would open for subscription on 12th December 2022.  Abans Holdings Ltd provides NBFC services in India. While its revenue is on declining mode, the company had strong margin growth in the last 3 years. Should you invest in Abans Holdings IPO? This article would provide IPO details, Dates, GMP, Listing Date and conclusion on whether this is good or bad for investment.

Also Read: Sula Vineyard IPO – Is it a unique IPO due to high entry barriers?

About Abans Holdings Limited

Company is incorporated in 2009 and is engaged in Financial Services, Gold Refining, Jewelry, Commodities Trading, Agricultural Trading and Warehousing, Software Development and Real Estate.

Its financial services include global institutional trading in equities, commodities and foreign exchange, private client stock broking, depositary services, asset management services, investment advisory services and wealth management services to corporate, institutional and high net worth clients.

Abans Holdings IPO – Details, Size, Dates and Review and Analysis

Abans Holdings IPO dates and other details

IPO Opening Date 12-Dec-22
IPO Closing Date 15-Dec-22
Issue Type Book Built Issue IPO
Face Value Rs 2 per equity share
IPO Price band Rs 256 to Rs 270 per equity share
Lot Size 55 Shares
Min Order Quantity 55 Shares
Listing at BSE and NSE
Total Issue Size Rs. 345.6 Crores
    Fresh issue     Rs. 102.6 Crores
    OFS     Rs. 243 Crores

Abans Holdings Limited IPO RHP

What are the strengths of Abans Holdings Limited?

1) Company is an integrated financial services platform

2) It has a strong human capital and organizational culture

3) Company with global exposure providing innovative financial products

4) It has strong relationships with clients and market participants

5) Company has standardized operating procedures and efficient use of technology

What are the Objects of the IPO Offer?

Abans Holdings IPO Size is Rs 345.6 Crores which consists of OFS and Fresh Issue

1) OFS for Rs 243 Crores – Under OFS, selling shareholders would sell their shares and the company would not get any money from this IPO proceeds.

2) Fresh issue for Rs 102.6 Crores – Fresh proceeds would be used for the following:

a) Further Investment in the NBFC Subsidiary (Abans Finance Pvt. Ltd.) for financing the augmentation of its capital base to meet its future capital requirements.

b) General Corporate Purpose

Who are the promoters of Abans Holdings Limited?

Mr. Abhishek Bansal is the promoter of the company.

How is the company financial track record?

Here are the total assets, revenues, and profits of the company in the last 3 years and 5 months.

Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22 31-Aug-22
Total Assets 1,213.0 1,181.5 1,168.7 1,230.7
Revenues 2,771.9 1,331.4 646.2 288.3
Profit After Tax 39.2 45.8 62.0 29.7
Profit % 1.41% 3.44% 9.59% 10.32%

Why to invest in Abans Holdings IPO?

Here are the positive factors in this company.

1) Abans Holdings Ltd is an integrated financial services platform with global exposure on providing innovative products.

2) Company had strong margin growth in the last 3 years. Its margins were at 1.4% in FY20 Vs. 9.59% in FY22. Even for 5 months ended Aug-22, its margins have improved to 10.3%

3) Company EPS is increasing year on year.

Risk Factors of investing in Abans Holdings IPO

1) Company revenues are in a down trend. Its revenues were at Rs 2,771 Crores in FY20 Vs. 646 Crores in FY22.

2) Company IPO proceeds contains an Offer for Sale (OFS) for Rs 243 Crores. Such IPO proceeds would go to selling shareholders and company would not get benefitted.

3) The continuing impact of covid-10 or the impact of outbreaks of any other communicable disease is highly unpredictable and could be significant and may adversely affect its business.

4) Company, Promoter/Director, its subsidiaries, and group companies are parties to certain legal proceedings. Any adverse decision in such proceedings may have a material effect on its business.

5) The company is primarily a holding company, and they operate all its business through its 17 subsidiaries and the performance of its subsidiaries may adversely affect its results of operations.

6) Company reported negative net cash flows in the past and may do so in the future.

7) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.

Abans Holdings IPO price Valuation

The Abans Holdings Limited IPO price band is confirmed to be INR 256 to 270 per share.

If we consider FY2022 EPS of Rs 13.37, the P/E ratio works out to be 20x.

If we consider last 3 years weighted EPS of Rs 11.39, the P/E ratio works out to be 24x.

If we annualize 5 months ended Aug-22 EPS, the P/E ratio works out to be 17x.

Means company is asking for the issue price in P/E of 17x to 24x. There are listed peers like IM+ Capitals Limited trading at P/E 81.9x (Highest) and Jindal Poly Investment and Finance trading at P/E 1.2x (Lowest) and industry average P/E is 31.4x. Hence Abans Holdings Ltd share price is attractively priced.

Abans Holdings dates – subscription, Allotment and Listing

Offer Open 12-Dec-22
Offer close 15-Dec-22
Finalization of Allotment 20-Dec-22
Initiation of Refunds 21-Dec-22
Credit to Demat Account 22-Dec-22
IPO Shares Listing Date 23-Dec-22

What is Abans Holdings IPO GMP?

GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market.

IPO GMP IPOWatch – Nil

IPO GMP Chanakya – Nil

IPO GMP as per IPOCentral – Nil

IPO GMP IPO Bazar – Nil

Also Read: Top Mutual Fund 20% SIP Returns in last 20 years

Abans Holdings IPO Review – Should you invest or not?

Abans Holdings Limited is an integrated financial services platform in India. Company had generated strong margin growth in the last 3 years. The issue price is attractively priced.

On the other side, its revenues are in a down trend. Company has other internal and external risk factors which investors need to understand.

I personally want to invest in companies that are consistently growing both in terms of revenues and margins. I would like to avoid such IPOs as of now.

Did you like our IPO Analysis, then share it with your friends on WhatsApp, FB, Twitter and Telegram?

Suresh KP

2 comments

  • Sanjeev

    Dear Suresh ji,
    Great analysis and guidance by you. I am totally rely on your directions from time to time and eable to invest safely.

    I would request you to guide on penny stocks .

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