Abans Holdings IPO subscribed 42% on Day 3, QIB quota booked more than twice

The company is selling its shares in the range of Rs 256-270 apiece between December 12 and 15, with a lot size of 55 shares. The issue comprises issuance of fresh shares worth Rs 102.6 crore and an offer for sale (OFS) of Rs 243 crore.

According to data from the BSE, investors made bids for 53,73,940 equity shares or 42% compared to the 1,28,00,000 equity shares offered for subscription by 2.15 pm on Wednesday, December 14.

The quota for retail bidders was subscribed 27% whereas the allocation for non-institutional investors and qualified institutional bidders was booked 13%. The allocation for qualified institutional buyers was subscribed 2.2 times.

Incorporated in 2009, Abans Holdings, the financial services arm of Abans Group, is engaged in financial services, gold refining, jewellery, commodities & agricultural trading, warehousing, software development and in real estate.

Majority of brokerages are dicey on the counter considering its rich valuations, high competition, low market shares and it being a 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.”

is the sole book-running lead manager to the issue, whereas Bigshare Services has been appointed as the registrar to the issue. Shares of the company will be listed at both the BSE and NSE.

“We find Abans being one of the beneficiaries of the government reforms,” said the brokerage. “Moreover, despite the shocks in the past such as the pandemic and current geopolitical situation, Abans Holding was able to grow at PAT levels in the last two years.”

The company operates in a highly competitive environment and a crowded space where there is little differentiation in terms of product offerings. On the upper end of the price band, the issue is valued at a P/E of around 20.1x on FY2022 earnings, with an ‘avoid’ rating for the issue.

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