Abans Holdings Limited incorporated on September 24, 2009, is a globally diversified organization engaged in Financial Services, Gold Refining, Jewellery, Commodities Trading, Agricultural Trading and Warehousing, Software Development, and Real Estate. The company represents the financial services arm of the Abans Group. It operates a diversified global financial services business, headquartered in India, providing NBFC services, global institutional trading in equities, and foreign exchange, private client stock broking, depositary services, asset management services, investment advisory services, and wealth management services to corporates, institutional and high net worth clients.
The company is primarily a holding company and it operates all of its businesses through 17 subsidiaries (including 3 direct subsidiaries and 14 indirect/step-down subsidiaries). The company has active businesses in 6 countries across the Eastern Continents, including Hong Kong, the UK, UAE, China, Mauritius, and India. On a consolidated basis, AHL employs 100 employees as of August 31, 2022.
Promoters & Shareholding:
Mr. Abhishek Bansal is the company promoter.
Public Issue Details:
Offer for sale: OFS of approx. 9,000,000 equity shares at Rs. 2, aggregating up to Rs. 243 Cr and fresh of approx. 3,800,000 equity shares at Rs. 2, aggregating up to Rs. 102.60 Cr.
Total IPO Size: Rs. 345.60 Cr.
Price band: Rs. 256 – Rs. 270.
Objective: For Further Investment in the NBFC Subsidiary and General corporate requirements.
Bid qty: minimum of 55 shares (1 lot) for Rs. 14,850 and maximum of 13 lots.
Offer period: 12th Dec 2022 – 15th Dec 2022.
Date of listing: 23rd Dec 2022.
- It offers its clients an integrated financial services platform.
- Global exposure providing innovative financial products.
- Standardized operating procedures and efficient use of technology.
- Professional and experienced management team.
- The company has reported negative net cash flows in the past and may do so in the future.
- Unexpected market movements and disruptions could affect its capital business making its revenues and profits highly volatile.
- Its insurance coverage may be inadequate
Subscribe or avoid?
Sectorial outlook – India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. As of July 2022, AUM managed by the mutual fund industry stood at $474.87 billion, and the total number of accounts stood at 135.6 million. Inflow in India’s mutual fund schemes via systematic investment plans stood at $6.10 billion. Equity mutual funds registered a net inflow of $294.15 billion by end of December 2021. The Indian equity market is expanding in terms of listed companies and market capitalization, widening the playing field for brokerage firms. The sophisticated products segment is growing rapidly, reflected in the steep rise in the growth of derivatives trading. In FY22, the number of listed companies on the NSE and BSE were 2,012 and 4,807, respectively. Total wealth held by individuals in unlisted equities is projected to grow at a CAGR of 19.54% to reach $273.69 billion by FY22. Non-banking financial companies (NBFCs) have also established themselves as an integral part of the financial landscape in recent times due to increasing access to technology and various government initiatives to encourage market participation by providing stable regulations.
The financials (revenue and net profit) are shown in the graph below:
Valuation – For the last 3 years average EPS is Rs. 10.57 and the P/E is around 32.7x on the upper price band of Rs. 346. The EPS for FY22 is Rs. 13.37 and the P/E is around 25.8x. If we annualize Q1-FY23 EPS of Rs. 6.42, P/E is around 13.47x. It has Edelweiss Financial Services Ltd (29.9x), Geojit Financial Services Ltd (9.6x), and Choice International Ltd (59x) as its listed peers as per the RHP. The company’s P/E is between 13.47x and 32.7x. The P/E valuation seems reasonable but the revenue has been decreasing in the last 3 years.
Recommendation – The company has a diversified portfolio but the financials are a little weak even though the profitability has increased, whether it will be able to grow its revenue and maintain margins is a question. After considering all the factors s we would recommend ‘Avoid’ this IPO.