ABS Marine Services Ltd IPO: Review, Valuation, Date & GMP

ABS Marine Services  IPO  - Complete Overview

ABS Marine Services registered and incorporated in Chennai in October 1992.  Its offices are strategically located in Mumbai, Kochi, Kakinada, and Singapore,

Abs marine Services possesses five offshore vessels as of December 31, 2023. The fleet includes two state-of-the-art offshore vessels tailored for the oil and gas industry, as well as three harbour vessels for Indian ports.

Currently, the company manages 12 vessels, which serve government agencies, public and private entities, as well as port authorities. A further 24 vessels are managed by the company, including oil tankers, gas carriers, bulk carriers, passenger ships, and high-speed vessels.

The financial year ended March 31, 2024, saw ABS Marine Services Limited increase revenue by 21.27% and profit after tax (PAT) by 147.22%.

Address: ABS Marine Services Limited  Flat No. 3, Anugraha Foundation No. 15,
Valliammal Road Vepery, Chennai – 600007 Phone: 044-42914135

Email: cs@absmarine.com

Website: http://www.absmarine.com

 

ABS Marine Services Limited IPO  Overview

ABS Marine Services, which manages offshore vessels, will launch its initial public offering (IPO) on May 10. There will be a price range between Rs 140 and 1Rs47 per share for the small and medium enterprise (SME) IPO closing on May 15.

ABS Marine Services' IPO is scheduled to be allotted by Thursday, May 16, 2024. A tentative listing date of Tuesday, May 21, 2024, has been set for the IPO on the NSE SME platform.

ABS Marine Services' IPO is expected to raise over 96.29 crore through a fresh issuance of 65.5 lakh shares. The minimum number of shares an investor can bid on is 1000, and multiples of that number are allowed. Retail investors are required to invest at least Rs 147,000. Investing in HNI requires 2 lots (2,000 shares) amounting to Rs.294,000.

According to ABS Marine Services' DRHP, not more than 50% of the issue is allocated to QIBs, not less than 35 percent to retail investors, and not less than 15 percent to non-institutional investors.

Captain P B Narayanan, Shreelatha Narayanan, Arathi Narayanan, and Captain Jeevan Krishnan Sanjeevan are the company's promoters.

For the ABS Marine Services IPO, GYR Capital Advisors Private Limited serves as book running lead manager, while Purva Sharegistry India Pvt Ltd is the registrar. For ABS Marine Services, Giriraj Stock Broking and Commodity Mandi have been designated as the market makers.

Company Financial

It is estimated that ABS Marine Services Limited's revenue grew by 21.27 percent and profit after tax (PAT) increased by 147.22% between March 31, 2024, and March 31, 2023.

Amount in Rs. Lakhs

Period Ended	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets	18,480.99	17,552.50	16,663.28
Revenue	13,801.89	11,380.78	8,283.98
Profit After Tax	2,355.41	952.74	809.43
Net Worth	11,717.39	9,352.42	8,370.01
Reserves and Surplus	9,917.39	9,351.42	8,369.01
Total Borrowing	4,567.96	4,866.29	6,114.77

 

Key performance indicators

Key Performance Indicator	For the period ended October 31, 2023	F.Y 2022-23	F.Y 2021-22
Revenue from Operations	6,109.50	11,125.12	7,163.01
Total Income	6,385.48	11,380.78	8,283.98
EBITDA	2,353.69	3,030.13	3,096.97
Net Profit for the Year / Period	1351.06	952.77	814.32
Return on Net Worth	12.62	10.19	9.73
Return on Capital Employed	12.02	11.87	9.69
Debt-Equity Ratio	0.41	0.52	0.73

 

The Objective of the Issue

• A major objective of ABS Marine Services Limited is to finance offshore vessel acquisitions and working capital requirements.
  
  
• A portion of the equity portion will be used to acquire offshore vessels: A portion of the Net Proceeds will be used to partially finance the acquisition of ships meeting size and quality criteria in FY 2024-25. Ship brokers estimate funding based on market conditions and internal estimates.
  
  
• Providing working capital for the company: Net Proceeds will be allocated to address the company's working capital requirements in FY 2024 up to INR 2,500 lakhs. Historically, the company has received financing from banks and accrued internal funds to support its significant working capital requirements.
  
  
• General corporate purposes: Funds will be allocated to strategic initiatives, partnerships, brand building, and general corporate needs.
  
  

Peers of ABS Marine Services Limited IPO

For details and comparisons of peers, please refer to the tables below. The net profit performance of ABS Marine Services Limited is steady, Shipping Corporation of India shows significant earnings, while Seamec Limited shows a lower but consistent net profit. 

Company	CMP(Rs. in lakhs)	Face Value (Rs.)	P/E (Rs.)	EPS (Basic)  (Rs.)	EPS (Diluted)  (Rs.)	RoNW (%)	Total Income (Rs.)
ABS Marine Services Limited	NA	10	NA	5.29	5.29	10.19	11,380.78
Shipping Corporation of India	233.65	10	12.51	18.68	18.68	13.52	5,90,721
Seamec Limited	1,159	10	87.81	13.20	13.20	4.45	45,722

 

Evaluation

Please refer ABS Marine Services IPO valuations that include Earnings Per Share (EPS), Price/Earnings P/E Ratio, Return on Net Worth (RoNW), and Net Asset Value (NAV) as per below table .

Earning Per Share (EPS):	Rs.13.09 per Equity Share
Price/Earning P/E Ratio:	NA
Return on Net Worth (RoNW):	20.10%
Net Asset Value (NAV):	Rs.65.10 per Equity Share

 

 

IPO's Strengths

Following industry conditions strengthens ABS Marine Services

• Indian shipbreaking is a major global market share for a maritime powerhouse with a strategic location. Tax incentives support comprehensive development initiatives such as Maritime India Vision 2030. 
  
  
• There are over 100 unicorns worth US$332.7 billion in India's robust economy, with a GDP of US$3.12 trillion. It is crucial to focus on renewable energy and job creation. Towards a US$1 trillion export target by 2030, exports are driving the recovery. 
  
  
• An investment of $123 billion is being made across 415 port-led projects under the Sagar Mala Program and the Maritime India Vision - major ports like Jawaharlal Nehru Port Trust and Deendayal Port handle most of the cargo. Partnerships between the public and private sectors facilitate ongoing projects worth $5 billion. 

 

IPO's Weaknesses

• Risks associated with ABS Marine Services Limited include regulatory compliance costs, price pressures from tenders, and onerous contract terms from PSU contracts. As vessels age and market dynamics change, the process of buying and selling vessels becomes more challenging.
  
  
• A significant reliance on contracts with PSU customers exposes the company to a variety of risks, including regulatory compliance costs, margin pressure from tender pricing, and onerous contract terms. Financial performance may be adversely affected by any adverse impact. 
  
  
• Maintenance costs rise as vessels age, utilization rates decline, and regulatory requirements may require costly modifications. Financial performance and operational efficiency could be adversely affected by unexpected repairs or scrapping. 
  
  
• In order to acquire vessels, they rely on the secondary market, which is affected by factors such as vessel availability, freight rates, and market dynamics. Capacity expansion and financial health may be affected by challenges in selling older vessels. 

ABS Marine Services GMP today

The Latest GMP of ABS Marine Services IPO is Rs.95.

An investor's willingness to pay more than the issue price is indicated by a grey market premium.

 

ABS Marine Services IPO Details :

IPO Date	May 10, 2024 to May 15, 2024
Listing Date	[.]
Face Value	Rs.10 per share
Price Band	Rs.140 to Rs.147 per share
Lot Size	1000 Shares
Total Issue Size	6,550,000 shares (aggregating up to Rs.96.29 Cr)
Fresh Issue	6,550,000 shares (aggregating up to Rs.96.29 Cr)
Issue Type	Book Built Issue IPO
Listing At	NSE SME
Share holding pre issue	18,000,000
Share holding post issue	24,550,000
Market Maker portion	410,000 shares

 

ABS Marine Services IPO Timeline (Tentative Schedule)

ABS Marine Services IPO opens on May 10, 2024, and closes on May 15, 2024.

IPO Open Date	Friday, May 10, 2024
IPO Close Date	Wednesday, May 15, 2024
Basis of Allotment	Thursday, May 16, 2024
Initiation of Refunds	Friday, May 17, 2024
Credit of Shares to Demat	Friday, May 17, 2024
Listing Date	Tuesday, May 21, 2024
Cut-off time for UPI mandate confirmation	5 PM on May 15, 2024

ABS Marine Services IPO Reservation

Investor Category	Shares Offered
QIB Shares Offered	Not more than 50% of the Net Issue
Retail Shares Offered	Not less than 35% of the Net Issue
NII (HNI) Shares Offered	Not less than 15% of the Net Issue

 

ABS Marine Services IPO Lot Size

A minimum of 1000 shares can be bid upon by investors, and multiples thereof can also be bid upon. Below is a table that shows the minimum and maximum investment amounts by retail investors and high net worth individuals.

Application	Lots	Shares	Amount
Retail (Min)	1	1000	Rs.147,000
Retail (Max)	1	1000	Rs.147,000
HNI (Min)	2	2,000	Rs.294,000

 

Promoter Holding for ABS Marine Services IPO

Company promoters include Captain P B Narayanan, Shreelatha Narayanan, Arathi Narayanan, and Captain Jeevan Krishnan Sanjeevan.

Share Holding Pre Issue	86.50%
Share Holding Post Issue	63.42%

 

Promoters and Management of ABS Marine Services Limited

• P B Narayanan
• Shreelatha Narayanan
• Arathi Narayanan
• Jeevan Krishnan Sanjeevan
  
  

ABS Marine Services Limited IPO Lead Managers and Registrar

ABS Marine Services IPO Registrar: Purva Sharegistry India Pvt Ltd

ABS Marine Services IPO Lead Manager(s) : GYR Capital Advisors Private Limited (Past IPO Performance)

Dividend Policy

According to the offer document, the company did not declare any dividends for the periods reported. Financial performance and prospects will determine its dividend policy.

Conclusion

Under one roof, the company provides marine-related services of all kinds. About six high margin contracts are ongoing and many more are in the pipeline. The issue appears fully priced based on FY24 super earnings. It enjoys long-term relationships with many renounced clients. With recent performance indicating prospects ahead, investors may consider investing for medium to long-term rewards.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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