Abans Holdings IPO
The Initial Public Offering (IPO) of financial services company Abans Holdings received bids for 12.92 lakh shares against the 12.8 million shares on offer to investors to be subscribed 10 percent on December 12, the opening day.
Retail investors led the bidding with 11 percent subscription, and high networth individuals bought 11 percent of their allotted quota. Qualified institutional investors are yet to show their interest in the IPO.
Here are 10 key things to know before subscribing to the IPO
1) IPO Dates
The offer opened for subscription on December 12 will close on December 15, 2022.
2) Price Band
The company has fixed the IPO price band at Rs 256-270 per share.
3) IPO Details
The IPO comprises of a fresh issue of 3.8 million shares and an offer for sale of 9 million by promoter Abhishek Bansal.
4) Fund Raising
The company is seeking to raise Rs 327.68 crore via the public issue at the lower price band and Rs 345.6 crore at the upper limit.
At the upper end of the price band, the size of the fresh issue is Rs 102.6 crore and the offer for sale quota is Rs 243 crore.
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5) Objectives of the Public Issue
A part of the money raised by the fresh issue will be used for investment in a subsidiary, Non-Banking Financial Company Abans Finance, for augmenting its capital base to meet future requirements. The balance amount will be set apart for general corporate purposes. The offer for sale money will go to selling shareholder Abhishek Bansal.
6) Lot size
Bids by investors can be made for a minimum of 55 equity shares and in multiples of 55 shares thereafter.
With this, the minimum application size for retail investors would be Rs 14,850 per lot and the maximum investment Rs 1,93,050 for 13 lots as they are allowed to invest up to Rs 2 lakh in the IPO.
7) Reservation of Shares
The company has reserved 10 percent of its issue size for qualified institutional buyers, 30 percent for non-institutional investors (high networth individuals) and the balance 60 percent for retail investors.
8) Company Profile
Abans Holdings is a part of the Abans Group founded by Abhishek Bansal, who holds a 96.45 percent stake in the company. Bansal is the Chairman and Managing Director.
The group is primarily engaged in financial services, gold refining, jewellery, commodities trading, agricultural trading and warehousing, software development and real estate. Abans Holdings is the financial services subsidiary of the Abans Group.
The company provides NBFC services, 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 entities, institutional and highnetworth clients.
It is primarily a holding company and operates all businesses via 18 subsidiaries.
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Promoter shareholding in the company will be reduced to around 72 percent post issue, from 97.42 percent now.
Abans Holdings has maintained healthy growth in profitability despite a decline in revenue. Consolidated profit for FY22 at Rs 61.97 crore grew by 35 percent, but revenue fell by 52 percent to Rs 638.6 crore compared to the previous year. Consolidated profit for the five months ended August 2022 (FY23) stood at Rs 29.7 crore on revenue of Rs 285 crore.
9) Key concerns
Here are key concerns highlighted by Cholamandalam Securities:
a) Abans Commodities (I), one of the subsidiaries, is involved in a proceeding before SEBI regarding allegations of participation/facilitation by it of pair-contracts (please explain this concept in simple terms) as a trading member/clearing member.
(Paired contracts entail buying and selling the same commodity through two different contracts and at two different prices on an exchange platform wherein investors could buy a short-duration contract and sell a long-duration contract at the same time and at a pre-determined price.)
b) Failure to obtain, retain and renew certain approvals and licences in timely manner or comply with rules and regulations can impact the company’s business.
c) Dependence on a few sets of market participants or counter-parties in physical commodities trading that supports online exchange-based trading operations.
d) Any downward revision in its credit ratings could adversely affect its ability to service debts as well as raise funds.
e) Vulnerable to the volatility in interest rates and may face interest rate and maturity mismatches between assets and liabilities in the future which may cause liquidity issues.
10) Allotment and Listing Dates
Abans Holdings will finalise the IPO share allotment by December 20, 2022. Refunds will be credited to the bank accounts of unsuccessful bidders by December 21 and the shares will be transferred to demat accounts of eligible investors by December 22.
The company will make its debut on the BSE and NSE on December 23.
Currently, its IPO shares are trading an around 5 percent premium to Rs 270 (the upper end of the price band) in the grey market, analysts said.
Aryaman Financial Services is the merchant banker to the issue and the registrar to the issue is Bigshare Services.
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