Abans Holdings Limited 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 corporates, institutional and high net worth clients. Since the inception of our Company, we have grown from being a commodities trading company into a diversified multi-asset and multi-national financial services company having varied financial services businesses which are mainly organized as under:1. Finance Business: They operate a RBI Registered NBFC (Non Deposit taking). The Finance business is primarily focused on lending to private traders and other small and medium businesses involved in the commodities trading market.2. Agency Business: They are 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. Further being FCA registered financial services firm in London, they have direct/indirect memberships in various international exchanges like DGCX (Dubai), LME (London), INE and DCE (China). They are also a SEBI Registered Portfolio Management company as well as a SEBI Registered Category-I FPI. They offer various institutional and non-institutional trading services, wealth management and private client brokerage services, mainly in equity, commodities and foreign exchange. 3. Capital and other Business: The Capital Business includes the internal treasury operations which manage their excess capital funds. They do so by investing the capital in low / medium risk strategies, maintaining positions in physical as well as exchange traded commodities and other instruments. Further they provide Warehousing Services to commodity market participants. On a consolidated basis they employ 100 employees as of August 31, 2022 including company and their seventeen subsidiary companies. As per financial performance, Abans has posted total income/net profits of Rs 2,771.88 Cr / Rs 39.21 Cr (FY20), Rs 1,331.37 Cr / Rs 45.79 Cr (FY21) and Rs 646.23 Cr / Rs 61.97 Cr (FY22) and Rs 288.31 Cr / Rs 29.74 Cr (5M FY23). So as per last three years data, company has shown decline in revenue, but growth in net profit and according to company, decline in revenue is due to higher treasury operations in exchange traded commodity instruments as compared to physically traded commodities in earlier years. They have posted an average EPS of Rs 11.39 and average RoNW of 8.15% for last three fiscals. Issue is priced at a P/BV of 1.85 as per NAV of 146.33 on 31.08.22. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 21.85, which looks fully priced, and if we take annaulized FY23 earnings than P/E is around 18.97. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Aryaman Financial Services Limited is associated with this IPO and handled 14 SME IPOs in last 3 years. From last 10 IPOs, all IPOs opened issue above or at par. As of now from last 10 IPOs, four are trading below and remaining are trading above issue price or at par. ( As on 06.12.22 ) As per financials, Abans Holdings Limited has shown decline in revenue, but good growth in net profit, RoNW is 9.01% and P/E is respectively 21.85 and 18.97 as per FY22 and annualized FY23 earnings, which looks fully priced. Company is in financial services related business which is highly competitive, also world is expected to go in recession due to higher inflation & increasing interest rates world wide, so near future may be very testing for financial services related business. Performance of BRLM is average. So, we give NEUTRAL rating for this IPO.
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