Abans Holdings IPO shares witness flat debut; shares fall 15% after poor listing

Abans Holdings IPO shares witness flat debut; shares fall 15% after poor listing

Abans Holdings IPO had a disappointing listing on the bourses on Friday amid weakness in domestic equity markets. Abans Holding shares debuted at Rs 270 on the BSE, which is the same as their issue price. Few minutes into the trade, the stock fell 15% to hit an intraday low of Rs 218 per equity share. The market predicted a muted listing ahead of the company’s debut since Abans Holding shares were trading at a Rs 3 premium on the grey market.

“The company’s muted listing, debuted at Rs. 273 over its issue price of Rs. 270. The issue had also not received a good response from investors on both the institutional and retail sides. The company has an integrated financial services platform and strong human capital. It has global exposure, provides innovative financial products, and also has a strong relationship with clients. However, while the company’s revenue has declined recently, it has also reported negative cash flow in the past. Secondly, it is a holding company that is dependent on its 17 subsidiaries and operates in a highly competitive market. Those who applied for listing gains can keep a Rs. 240 stop loss,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart.

The company has fixed the IPO price band at Rs 256 – 270 per equity share. Abans Holdings aims to raise Rs 345.60 crore from this IPO. The initial share sale comprises fresh issuance of equity shares of up to 38 lakh and an offer-for-sale (OFS) of up to 90 lakh equity shares by promoter Abhishek Bansal. Most analysts recommended that investors avoid applying for the issue.

“There is huge competition in the broking industry with top key companies having the majority of market share, while Abans is a 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,” said Reliance Securities in its IPO note prior to Abans Holdings’ listing.

AHL represents the financial services arm of the Abans Group. They operate a diversified global financial services business, headquartered in India, providing NBFC services, multi-asset global institutional trading in equities, commodities and foreign exchange, private client broking, asset management & investment advisory services and wealth management services to corporate, institutional and high net worth individual clients.