Abans Holdings Limited - IPO Note

Finance - NBFC

Abans Holdings Limited - IPO Note

Finance - NBFC

Price range
Rs. 256 – 270
Issue Period:
Dec 12, 2022
Dec 14, 2022
December 09, 2022

Stock Info

CNX Nifty
Face value (Rs.)
Market lot
Issue size
Rs. 345.60 cr.
Public Issue
1.28 cr. shares
Market cap post IPO
1354 cr.
Equity Pre - IPO
4.63 cr.
Equity Post - IPO
5.01 cr.
Issue type
Fresh Issue and Offer for Sale

Shareholding (Pre IPO)

Source: Ace equity, StockAxis Research

Shareholding (Post IPO)

Source: Ace equity, StockAxis Research

Company Description

Abans Holdings Limited (“AHL”) was incorporated on September 24, 2009. The company is part of Abans Group, which is globally diversified organization engaged in Financial Services, Gold Refining, Jewelry, Commodities Trading, Agricultural Trading and Warehousing, Software Development and Real Estate. The group is founded by young entrepreneur - Abhishek Bansal.

AHL represents the financial services arm of the Abans Group. They operate a diversified global financial services business, headquartered in India, providing 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, institutional, and high net worth clients. The company is having varied financial services businesses which are mainly organized as under:

Finance Business: AHL operates as RBI Registered NBFC (Non-Deposit taking). Its Finance business is primarily focused on lending to private traders and other small and medium businesses involved in the commodities trading market.

Agency Business: AHL is SEBI registered Stock and Commodity Exchange Brokers with memberships across all the major stock exchanges in India, including BSE, NSE, MSEI, MCX, NCDEX and ICEX.

Capital and other Business: The Capital Business includes their internal treasury operations which manage their excess capital funds. AHL do so by investing their capital in low / medium risk strategies, maintaining positions in physical as well as exchange traded commodities and other instruments.

Abans Holdings

Competitive Strengths

Integrated financial services platform
AHL offers their clients an integrated financial services platform, offering various financial services and products, including financing, institutional trading, private client brokerage, asset management and investment advisory services. Further, these services are provided not only in the Indian markets but across various markets and exchanges globally. Besides being members of the BSE, NSE, MSEI, NCDEX, ICEX, MCX and IIEL in India, they have memberships across various global commodity and forex exchanges including London Metal Exchange (LME), Dubai Gold & Commodities Exchange (DGCX), Dalian Commodity Exchange (DCE) and Shanghai International Energy Exchange (INE). Further they have in-house NBFC business which provides lending support to their clients.

Global exposure providing innovative financial products
AHL offer their clients with access to various commodity trading avenues through their direct/ indirect memberships in LME, DGCX, DCE and INE. They specifically offer a Contract for Difference (“CFD”) product to their institutional and HNI clients with a risk appetite. The commodities traded globally also provide their trading teams with ample arbitrage and short-term investment opportunities for their internal treasury operations. Their international exposure helps their customers diversify a portfolio, which in turn provides a balance between geographies.

Strong relationships with clients and market participants
Over the period AHL has grown their network of clients and traders not only in India, but also on a global scale, mainly in UK, Mauritius, Hongkong and the Middle East. Their focus on client coverage and their ability to provide ongoing and innovative solutions in terms of diversity of investment avenues and global execution, enables them to establish long-term relationships with institutional and high net worth individual clients.

Peer Comparison

Name of the company (2022) Sales (Rs. In cr) PAT (Rs. in cr) ROE (%) ROCE (%) EPS(Rs) FY22 PE(x) FY22
Abans Holdings Limited 284.89 29.74 9.13% 8.00% 13.37 20.19
Edelweiss Financial services Limited 6911.40 212.00 2.77% 22.35% 2.11 27.44
Geojit Financial Limited 480.79 143.00 20.00 26.73 6.31 7.28


Key Areas of concern

  • Legal Proceedings – Abans Holdings Limited, their promoters and other group companies are subject to certain legal proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business.
  • Negative Cash Flows – Company have recorded negative cash flows consistently in the last 3 financial years. Cash Flow from operating activities as of FY22 stood at (-Rs.11.5 cr).
  • Competitive intensity – Company operates in a highly competitive verticals such as NBFC Financing, Stock and Commodity Broking, Wealth Management activities, Treasury Operations, and its inability to compete with these players could adversely affect our results of operations and financial conditions.
  • Volatility in capital markets -unexpected market movements and disruptions could affect its capital business making revenues and profits highly volatile.

Other Risks

  • Offer for Sale (OFS) - The Offer consists of the Fresh Issue of Rs.102.6 cr and an Offer for Sale (Rs.243 cr). by the Promoter Selling Shareholder. Company will not receive any proceeds of the Offer for Sale.
  • Contingent Liabilities – Company has contingent Liabilities worth Rs.141 cr.


On the valuation front, Abans Holdings Limited is valued at 20x FY22E (EPS of Rs.13.37) calculated at the upper band of Rs.270.

Though the valuation appears reasonable but due to weak financial performance, competitive space, lack of triggers for growth, legal proceedings, and key risks & concerns mentioned above. We assign an AVOID rating to the issue.

Key Information

Use of Proceeds:
The total issue size is Rs.345.60 cr, of which Rs.102.60 cr is Fresh issue and balance (Rs.243 cr) is Offer for Sale (OFS). The company will utilize the net proceeds from the fresh issue for additional investment in its NBFC subsidiary for augmentation of its capital base to meet its future capital requirements and remaining for general corporate purposes.

Sr. No. Particulars Amount (INR. CR.)
1 Further Investment in its NBFC subsidiary for augmenting the capital base to meet its future capital requirements. 80
2 General Corporate Purposes 22.6
3 Total 102.6

Book running lead managers:
Aryaman Financial Services Limited

Abhishek Bansal (Chairman and Managing Director), Nirbhay Vassa (Whole time director), Shivshankar Singh (Non-Executive Director), Rahul Dayama, Rachita Mehta and Ashima Chattwal (Independent Directors).

Financial Statement

Profit & Loss Statement:- (Consolidated)

Particulars (in Crores) FY20 FY21 FY22
Revenue 2765.00 1325.51 638.63
COGS 2629.56 1171.00 519.00
Gross Profit 135.44 154.51 119.63
Gross Margins (%) 4.90% 12.00% 19.00%
Employee Benefits Expenses 23.35 14.84 12.95
Other expenses 22.00 64.00 22.27
EBITDA 90.09 75.67 84.41
EBITDA Margin (%) 3.00% 6.00% 13.00%
Depreciation and Amortization 1.36 1.11 0.72
EBIT 88.73 74.56 83.69
Other Income 6.67 5.85 7.61
Finance Cost 53.20 31.30 25.51
Profit Before Tax & Exceptional items 42.20 49.11 65.79
Exceptional Items 0.46
Profit before tax 66.25
Tax Expenses 3.11 3.31 4.28
Effective Tax Rate (%) 7.00% 7.00% 6.00%
PAT 39.09 45.80 61.97
PAT Margin (%) 1.00% 3.00% 10.00%
EPS(Rs.) 8.46 9.88 13.37