Abans Holdings IPO: FIIs show strong demand on Day 2, QIB portion fully subscribed
3 min read . Updated: 13 Dec 2022, 01:11 PM IST
Premium- Under the IPO, the company is offering a fresh issue of 38 lakh equity shares and an offer for sale (OFS) of up to 90 lakh equity shares. Promoter Abhishek Bansal is the selling shareholder under the OFS.
Aban Group-backed financial services provider, Abans Holdings' ₹345.60 crore initial public offering (IPO) on Tuesday received strong demand from qualified institutional buyers (QIBs) as the portion reserved for this category is fully subscribed with foreign investors making the entire buying. Overall, the IPO so far on the second day is subscribed by 24% on both BSE and NSE. In this public offer, bidding will be allowed till December 15. The IPO is a mixture of fresh issues and offers for sale (OFS).
As per the NSE data, at around 12.33 pm, cumulatively the IPO received bidding of 31,04,310 equity shares compared to the offered size of 1,28,00,000 equity shares --- subscribing by 24%.
At the same time, the QIBs category was fully subscribed by 1.01 times with bids of 12,96,350 equity shares compared to the reserved portion of 12,80,000 equity shares. Foreign Institutional Investors(FIIs) are the sole bidders of these shares as of now. Under QIBs, investors such as FIIs, domestic financial institutions, mutual funds, and others are allowed to bid. Currently, only FIIs have bid for 12,96,350 equity shares.
Furthermore, the portion reserved for retail individual investors (RII) was subscribed by 17% with bids of 13,24,015 equity shares against the offered size of 76,80,000 equity shares. While the non-institutional investors (NIIs) category bid for 4,83,945 equity shares -- subscribing by 13% against the reserved size of 38,40,000 equity shares.
The bidding for IPO shares is allowed from 10 am to 5 pm on stock exchanges. Abans Holdings IPO was launched on December 12 and will continue till December 15.
Under the IPO, the company is offering a fresh issue of 38 lakh equity shares and an offer for sale (OFS) of up to 90 lakh equity shares. Promoter Abhishek Bansal is the selling shareholder under the OFS. Of the total size, about 10% of the issue size is reserved for QIBs, while 30% is kept for NIIs and the highest portion which is about 60% is reserved for retail investors.
The price band for the public offer is fixed at ₹256 per share to ₹270 per share at a face value of ₹2 each. The bid lot size is 55 equity shares and in multiples thereof.
From the fresh issue proceeds, the company plans to use ₹80 crore to further invest in its NBFC subsidiary, Aban Finance for financing the augmentation of its capital base to meet its future capital requirements. Also, proceeds will be used for general corporate purposes. Notably, Aban Finance contributes to about 2-5% of the company's revenue over the last 3 years.
Abans Holdings 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.
In its IPO note, Reliance Securities said, "There is huge competition in the broking industry with top key companies have majority of market share, while Abans is relatively unknown brand in the market. Based on FY22 earnings, the company is valued at 20.2x P/E, 1.7x P/BV, and 1.9x EV/Sales. The focus of the company is on nurturing long-term relationships with their trading counterparts as well as HNI and institutional clients and providing service to them. The expansion into warehousing business, strong sector potential is key positive, while valuation seems pricey based on current financial position."
While Chola Wealth in its report said, "Abans does not have any listed peers with similar verticals as it’s a diversified business. The IPO is priced at a P/E of 27 which we feel is an aggressive valuation so our recommendation on the IPO would be “AVOID"."
Post the IPO issue, the equity shares will be listed on BSE and NSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
