The Initial Public Offering (IPO) of Abans Holdings Ltd will close for today, December 15. The IPO opened on December 12 and received 14.3 lakh bids for the 1.28 crore shares offered. On the second day, the Rs 345.60 crore- issue was subscribed 28 per cent, where bids for over 35 lakh shares were recorded. The price band for the offer has been fixed at Rs 256 – Rs 270 per share.
The IPO includes a new issue of Rs 38 lakh shares and a 90 lakh share offer for sale by promoter and founder of Abans Holdings Abhishek Bansal. He is also the company’s chairman and managing director.
The second day of the IPO recorded a full subscription for the Qualified Institutional Buyers (QIBs) portion while the retail investors’ portion was subscribed 23 per cent and the non-institutional investors 13 per cent.
Once the IPO is closed, the shareholding of the promoters will drop from the present 97.4 per cent to 72 per cent.
60 per cent of the offer has been reserved for retail investors and 30 per cent for non-institutional buyers or high-net world individuals. Qualified institutional buyers get to bid for 10 per cent of the IPO.
The GMP price of Abans Holdings Ltd shares was Rs 10 on the second day of subscription while the shares were available at a premium of Rs 15 a day before in the grey market.
With the last day of Abans Holdings Ltd IPO, it is advised to make an investment only after assessing the company’s fundamentals and business. TheGrey market, being highly speculative, may not provide the right idea about the company’s actual position.
A financial services division of the Abans Group, Abans Holdings Ltd deals in international institutional equity, NBFC services, foreign exchange, private client services, and commodity. It also offers asset investment, investment, and wealth management services to institutional, corporate, and high-net worth clients. The company has businesses in six countries namely the UK, UAE, Hong Kong, India, China, and Mauritius.
The company has planned to invest the proceeds from the fresh issue in its Abans Finance, its NBFC subsidiary.
Should you Invest?
Majority of the brokerage firms are dicey on the counter considering its rich valuations, high competition, low market shares and lesser known brand.
Considering the FY2022 adjusted EPS of Rs 12.36 on a post issue basis, the company is going to list at a P/E of 21.85x with a market cap of Rs 1,353.9 crore whereas its peers namely Geojit and Choice are trading at P/E of 9.62x and 59.0x, respectively, said Marwadi Financial Services.
“We assign ‘subscribe with caution’ rating to this IPO as it is a global exposure providing innovative financial products company,” it added. “Majority of its NBFC advances are unsecured and not supported by any collateral which keeps us cautious from a long term perspective.”
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