Subscription, GMP And Other Details; Should you Buy?

The Indian Public offering (IPO) of Abans Holding Ltd opened for subscription on Monday, December 12. The bids for the IPO will continue through December 15, with the market debut planned for next week. On the first day, the IPO received 14.3 lakh bids against the 12.8 million shares on offer. The total equity shares include a fresh issue of 3.8 million and 9 million of an offer for sale by promoter Abhishek Bansal. The bidding on the first day was led by retail investors with the highest 13 per cent subscription while high net-worth individuals bought 12 per cent of the quota fixed for them. The Abans IPO is yet to receive much interest from Qualified Institutional Buyers. The company has fixed a price band of Rs 256- 270 per share. The company aims to raise Rs 327.68 crore at the lower price band of the IPO and Rs 345.6 crore at the upper limit.

After the IPO, the shareholding of the promoters in the company will come down to 72 per cent from the present 97.4 The process of the IPO will be used by Abans to increase the capital base and meet future capital requirements.

The shares of Abans Holdings Ltd are available with a grey market premium of Rs 10 on the second day of subscription. This means the grey market expects the IPO to get a listing of Rs 280 (Rs 290 + 10) on its debut. While the grey market sentiments look positive for the IPO, investing based on the GMP trend is not advisable. The Grey market is highly speculative in nature and may not be a correct reflection of the company’s position. Any investment in the IPO must be based on the company’s fundamental and business perspective.

Abans Holdings deals in NBFC services, international institutional equity, commodity, and foreign exchange trading, and private client services. The company also offers asset management, investment and wealth management services to corporate, institutional, and high-net-worth clients. It has a presence in six countries- Hong Kong, the UK, the UAE, China, Mauritius, and India.

Of the IPO size, 30 per cent is reserved for non-institutional buyers or high-net world individuals where retail investors can bid for 60 per cent of the total offering. Eligible institutional buyers get to bid for only 10 per cent of the IPO.

Should you Buy?

In its IPO note, Reliance Securities said, “There is huge competition in the broking industry with top key companies have majority of market share, while Abans is relatively unknown brand in the market. Based on FY22 earnings, the company is valued at 20.2x P/E, 1.7x P/BV, and 1.9x EV/Sales. The focus of the company is on nurturing long-term relationships with their trading counterparts as well as HNI and institutional clients and providing service to them. The expansion into warehousing business, strong sector potential is key positive, while valuation seems pricey based on current financial position.”

While Chola Wealth in its report said, “Abans does not have any listed peers with similar verticals as it’s a diversified business. The IPO is priced at a P/E of 27 which we feel is an aggressive valuation so our recommendation on the IPO would be “AVOID”.”

Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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