ABS Marine Services Limited was started by the diligent promoter, Capt. P B Narayanan, a person with long experience of more than 4 decades in the Shipping Industry. The company started operations with two offshore vessel management and as of the date of December 31, 2023 they have 5 owned vessels comprising of 2 advanced offshore vessels servcing the Oil & Gas sector & 3 Harbour Crafts serving the Indian Ports sector. They have one long term chartered specialised multipurpose offshore vessel serving the Oil & Gas Sector. In addition, as of December 31, 2023 they are carrying out total ship management of 12 vessels on behalf of Government, public sector undertakings, private companies and port authorities. They providing crew management services to a further 24 ships comprising Oil Tankers, Gas Tankers, Bulk Carriers, Passenger Vessels and Hisgh Speed Crafts. The fully owned, chartered-in, totally managed & crewed fleet includes state of the art DP-2 Multipurpose offshore Supply Vessels, Anchor Handling Towing Supply Vessel, multi-disciplinary Ocean Research Vessels, Coastal Research Vessels, Fishery Oceanographic Research Vessel, Bulk Carriers, Gas Tankers, Oil Tankers, Passenger Vessels, High Speed Crafts & Harbour Crafts. They are a fully integrated company with in-house complete vessel management including commercial management. The customers are primarily comprised of Government of India, large industrial concerns, public sector undertakings, port authorities and private sector. They have also entered into 10 (ten) strategic contracts with Governemnt agencies which contributes towards the Revenue from Operations. Out of the ten contracts, one major contarct with the Ministry of Earth and Science (MOES) contributes towards our 23.50% of the Revenue from operations. As per financial performance, ABS Marine Services Limited has posted total income / net profits of Rs 91.95 Cr / Rs 2.12 Cr (FY21), Rs 82.84 Cr / Rs 8.37 Cr (FY22), Rs 113.81 Cr / Rs 10.22 Cr (FY23) and Rs 138.02 Cr / Rs 25.41 Cr (upto Q3 FY24). So as per previous financials data, company has shown good growth, but sudden increase in net profit, just before IPO generates some doubts. Company has posted an average EPS of Rs 9.06 and average RoNW of 15.06% for last three fiscals. Issue is priced at a P/BV of 2.26 as per NAV of 65.1 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 43.08, 35.32 and 14.20 respectively, which looks fairly priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, GYR Capital Advisors Private Limited is associated with this SME IPO and handled 23 SME IPOs in last 3 year. From last 23 SME IPOs, all opened above issue price on the day of listing. As of now from last 23 SME IPOs, four are trading below issue price and remaining are trading above issue price. ( As on 07.05.24 ) As per financials, ABS Marine Services Limited has shown good results, RoNW is 20.30% and P/E is respectively 43.08, 35.32 and 14.20 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced and sudden rise in net-profit is very surprising. Company is in business of offshore vessels management, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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