Abans Holdings IPO | Key things to know before you subscribe | Value Research The non-operating holding company of the Abans Group has come out with an IPO. Read to find out if it's a good bet.
IPO Analysis

Abans Holdings IPO: Should you apply?

The non-operating holding company of the Abans Group has come out with an IPO. Read to find out if it's a good bet.

abans-holdings-ipo-should-you-apply

About:
Abans Holdings is a non-operating holding company for the Abans groups' financial services companies. It primarily has three revenue sources:

  • Finance business (2.7 per cent of revenue) - lending services to private traders and SMEs.
  • Capital business (92.3 per cent of revenue) - internal treasury operation, i.e., invest the excess capital funds of Abans Group in various assets.
  • Agency business (5 per cent of revenue)- It provides institutional trading, wealth management and asset management services to corporates, HNIs and retailers.

Strengths:

  • Its integrated financial services platform allows clients to invest in a variety of asset classes. It also has tie-ups with various exchanges, such as BSE, NSE, MESI, etc.

Weaknesses:

  • High intercompany transactions: In FY22, 11 per cent of its revenue came from transactions with companies within the Abans Group.
  • Political contributions: The subsidiaries have made significant contributions to electoral bonds in the past. In FY21 and FY19, political contributions as a percentage of profits were 41 and 43 per cent, respectively.
  • Exposure to market fluctuations: The company derives most of its revenue from its capital business, which is highly exposed to fluctuations in the capital and commodity markets.
  • Unpredictable: It is extremely difficult to predict the performance of this entity as it is tied to the performance of the various subsidiaries.

Disclaimer: This is not a stock recommendation. Do your due diligence before investing.

Suggested read: Sula Vineyards IPO


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