Abans Holdings May-24
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Questions and Answers

What is the primary focus of the Finance Business mentioned?

  • Providing trade opportunities in global markets
  • Advising high net worth individuals
  • Managing alternative investments
  • Offering secured and unsecured term financing (correct)
  • Which of the following best describes the growth of consolidated revenues for the company?

  • Approximately 11% year-on-year increase
  • 18.5% year-on-year growth (correct)
  • 4.5% year-on-year increase
  • 27% year-on-year growth
  • What was the amount of net profits reported for the year?

  • Rs. 89 crores (correct)
  • Rs. 1,665 crores
  • Rs. 2,500 crores
  • Rs. 150 crores
  • By how much did EBITDA margins increase year-on-year?

    <p>3.5% (A)</p> Signup and view all the answers

    What contributed significantly to the increase in assets under management?

    <p>The acquisition of SATCO Growth &amp; Momentum portfolio (B)</p> Signup and view all the answers

    What was the approximate amount of assets under management as of March 2024?

    <p>Rs. 2,500 crores (B)</p> Signup and view all the answers

    What strategic approach did the company emphasize in its performance?

    <p>Growth in the asset management sector (B)</p> Signup and view all the answers

    What body approved the company to operate as an Investment Manager for alternative investment funds?

    <p>Securities and Exchange Board of India (SEBI) (C)</p> Signup and view all the answers

    What is the primary purpose of the Earnings Call?

    <p>To educate and raise awareness about the company's financial performance (B)</p> Signup and view all the answers

    Which of the following roles is NOT mentioned as part of the management participating in the call?

    <p>Chief Operating Officer (A)</p> Signup and view all the answers

    Which statement best describes Abans Holdings Limited?

    <p>A diversified financial services company with global operations (C)</p> Signup and view all the answers

    What cautionary advice is given regarding forward-looking statements?

    <p>They may not accurately reflect future results due to risks and uncertainties (B)</p> Signup and view all the answers

    In which regions does Abans Holdings Limited have established operations?

    <p>India, United Kingdom, Dubai, and Mauritius (A)</p> Signup and view all the answers

    Who introduced the management participants in the Earnings Call?

    <p>Purvangi (B)</p> Signup and view all the answers

    Which of the following services is NOT listed as part of Abans Holdings Limited's offerings?

    <p>Commercial Banking (C)</p> Signup and view all the answers

    What is emphasized during the call regarding investment decisions based on forward-looking statements?

    <p>They should be made cautiously and not based solely on predicted outcomes (D)</p> Signup and view all the answers

    What percentage of the company's borrowings are asset-backed?

    <p>70% (B)</p> Signup and view all the answers

    What is the company's current stance on equity dilution in the next 12 months?

    <p>They have no plans to dilute equity. (B)</p> Signup and view all the answers

    What commodity supplies does the company potentially provide for ETFs?

    <p>Gold and silver (D)</p> Signup and view all the answers

    What action has the company taken regarding mutual funds?

    <p>They have applied for a mutual fund license. (A)</p> Signup and view all the answers

    What is the company's understanding of Agri-commodities lending?

    <p>It has grown over the years. (A)</p> Signup and view all the answers

    What is a requirement for ETFs that the company is connected to?

    <p>They must have underlying commodities in place. (A)</p> Signup and view all the answers

    What is the current status of the company's applications for ETF sponsorship?

    <p>They are still awaiting approval. (A)</p> Signup and view all the answers

    What sectors has the company indicated it will not venture into for lending operations at this time?

    <p>Sectors other than Agri-commodities (D)</p> Signup and view all the answers

    What is the Sharpe ratio mentioned in the conversation?

    <p>3.12 (D)</p> Signup and view all the answers

    When was the Sharpe ratio 3.12 recorded?

    <p>April 30, 2024 (C)</p> Signup and view all the answers

    What is the expected net exposure of the global arbitrage fund according to Abhishek Bansal?

    <p>Almost 0% (A)</p> Signup and view all the answers

    What aspect of risk does Harsh Agarwal inquire about regarding spread changes?

    <p>Value at risk (C)</p> Signup and view all the answers

    What does Nirbhay Vassa say is necessary to access U.S. investor funds?

    <p>Regulatory approval (B)</p> Signup and view all the answers

    What was the percentage drop in revenue compared to the last quarter, according to Smit Mehta?

    <p>50% (C)</p> Signup and view all the answers

    What is the nature of the spreads discussed by Abhishek Bansal?

    <p>Fungible and settle at the same price (B)</p> Signup and view all the answers

    What regulatory body is Nirbhay Vassa referring to for their license application?

    <p>Securities and Exchange Commission (SEC) (C)</p> Signup and view all the answers

    What is the company's approach to addressing regulatory requirements in different regions?

    <p>They look at it from a bird's eye view. (C)</p> Signup and view all the answers

    What is the income mentioned in the content attributed to?

    <p>New income from global collaborations. (B)</p> Signup and view all the answers

    What role does SMC Global Taurus Wealth play in the business model described?

    <p>They serve as a sales team for distribution. (D)</p> Signup and view all the answers

    What is the company's primary function regarding financial products?

    <p>Ideation and manufacturing of financial products. (B)</p> Signup and view all the answers

    What type of opportunities does Harsh Agarwal ask about?

    <p>Global arbitrage opportunities. (C)</p> Signup and view all the answers

    Which financial metric does Abhishek Bansal ask for clarification on?

    <p>Information ratio. (A)</p> Signup and view all the answers

    What is one of the company's strategies for market expansion?

    <p>Replicating licenses in different countries. (D)</p> Signup and view all the answers

    Which statement best describes the company's current focus regarding industry engagement?

    <p>Covering various industries across the globe. (C)</p> Signup and view all the answers

    What was the reported loss for Abans Holdings on a standalone basis for the full year?

    <p>Rs. 6.72 crores (D)</p> Signup and view all the answers

    What was the primary reason for the loss reported by Abans Holdings?

    <p>Employee Stock Options issued to 16 employees (C)</p> Signup and view all the answers

    What new licenses has Abans Holdings received to improve their financial performance?

    <p>SEBI and IFSC licenses to act as an investment manager (D)</p> Signup and view all the answers

    What is the approximate value of assets under management for Abans Holdings from AIFs?

    <p>Rs. 300 crores (D)</p> Signup and view all the answers

    What financial outcome is expected for Abans Holdings in the coming year?

    <p>Positive P&amp;L due to AIF performance and reimbursement incomes (A)</p> Signup and view all the answers

    What area is of interest for the current year instead of gold lending?

    <p>Agri-commodities (A)</p> Signup and view all the answers

    In which year did Abans Holdings expect to pass on the employee costs to subsidiary companies?

    <p>Last quarter of 2024 (D)</p> Signup and view all the answers

    What does Nirbhay Vassa suggest about the future revenue composition of Abans Holdings?

    <p>Potential transitions from capital business to finance or agency business (C)</p> Signup and view all the answers

    Flashcards

    Forward-Looking Statements

    This term refers to statements that are not based on current facts but instead predict future performance or outcomes.

    Risk and Uncertainties

    This refers to the potential for future events to impact the accuracy of forward-looking statements.

    Fundamental Business

    This refers to the company's primary business areas and operations.

    Financial Quarter Under Review

    This refers to the company's performance during a specific period, usually a quarter or year.

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    Treasury Operations

    Managing finances, including investments and cash flow.

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    Remittance Services

    Sending money to individuals or businesses in other countries.

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    Abans Holdings Limited

    Abans Holdings Limited is a company providing a wide range of financial services.

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    Global Presence

    In addition to India, the company operates in the United Kingdom, Dubai, and Mauritius.

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    Revenue

    The company's revenue, which represents the total amount of money earned during a specific period.

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    EBITDA

    Earnings before interest, taxes, depreciation, and amortization. It is a measure of a company's profitability before deducting certain expenses.

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    EBITDA Margin

    The ratio of EBITDA to revenue, indicating the company's operational efficiency.

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    Net Profit

    Net profit is the amount of money a company earns after deducting all expenses, including taxes.

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    PAT (Profit After Tax) Margin

    The ratio of net profit to revenue, showing the company's overall profitability.

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    Assets Under Management (AUM)

    A financial measure reflecting the total value of client assets managed by a company. It highlights the company's success in attracting investments.

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    Global Arbitrage

    A profitable strategy to exploit price differences in financial markets across various locations and currencies.

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    Alternative Investments

    Investments in various assets, potentially less correlated to traditional markets, with the aim of generating returns and managing risk.

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    Debt-to-equity ratio

    The ratio of a company's total debt to its total equity. It indicates how much of the company's assets are financed by debt.

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    Interest coverage ratio

    A financial ratio that measures a company's ability to cover its interest expenses with its earnings before interest and taxes.

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    Commodity ETF

    A type of investment fund that tracks the performance of a specific commodity, like gold or silver.

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    Asset-backed borrowing

    A company's ability to continue borrowing money based on the value of its assets.

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    Non-asset-backed borrowing

    Borrowing money by promising to repay it later, even if the borrower doesn't have valuable assets to secure the loan.

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    Equity dilution

    The process of selling new shares of a company to raise capital, which can dilute the ownership percentage of existing shareholders.

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    ETF sponsorship

    The process of issuing and managing an exchange-traded fund (ETF).

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    Mutual fund license

    A license to operate a mutual fund, which allows a company to pool money from multiple investors and invest in a diversified portfolio of assets.

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    Agri-commodities lending

    The ability to make loans for agricultural commodities, such as grains or livestock.

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    What is Abans Holdings' current business model?

    Abans Holdings currently functions as a holding company and manages investments through Alternative Investment Funds (AIFs).

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    What caused Abans Holdings to report a loss in the previous year?

    Employee stock options were granted to a select group of 16 employees, resulting in a net loss for Abans Holdings as a standalone entity.

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    What licenses did Abans Holdings receive recently?

    Abans Holdings received licenses from SEBI and IFSC to manage investments for AIFs, which currently hold around Rs. 300 crores in assets.

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    How will Abans Holdings generate revenue in the current year?

    The company expects to generate income from AIFs based on their performance and redemptions.

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    How will Abans Holdings offset the cost of employee stock options?

    Abans Holdings will reimburse its subsidiary company's employees for the costs associated with stock options. This reimbursement will contribute to the company's income.

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    What is the projected financial outlook for Abans Holdings?

    The company expects to become profitable in the upcoming year.

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    What is the expected revenue transition for Abans Holdings?

    The company will focus on its finance and agency businesses, which will create a shift in revenue compared to its capital business.

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    What is the expected revenue composition in the coming years?

    The company expects to see a significant shift in revenue generation from its capital business towards its finance and agency businesses.

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    Information Ratio

    The ratio of a portfolio's excess return to its risk, measured by standard deviation. It helps evaluate the efficiency of an investment strategy.

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    Net Exposure

    The overall exposure of a portfolio to various market factors like stock prices, interest rates, and exchange rates. A positive exposure indicates a bullish outlook, while a negative one suggests a bearish outlook.

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    VAR

    Value at Risk (VaR) is a statistical measure that estimates the potential loss an investment might experience over a specific period with a given degree of confidence. It helps quantify risk.

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    Strategic Tie-Up

    Strategic alliances formed between companies with complementary strengths, where one company provides a product or service and the other handles distribution and sales to their target audience.

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    KYC (Know Your Customer)

    The practice of verifying and ensuring the legitimacy and identity of clients, often involving stringent due diligence and regulatory compliance procedures, to prevent fraud and money laundering.

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    Regulatory Approvals

    Approvals and licenses granted by government bodies or regulatory authorities to allow businesses to operate in a specific industry or field.

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    Industry By Industry Analysis

    The systematic study and analysis of different markets and industries across the globe to understand their specific regulations, opportunities, and potential risks.

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    What is the Sharpe Ratio?

    Sharpe ratio is a measure of risk-adjusted return. It compares the portfolio's excess return over a risk-free rate to its volatility (standard deviation). A higher Sharpe ratio generally indicates better performance.

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    What is the Information Ratio?

    The Information Ratio measures the risk-adjusted performance of a portfolio relative to a benchmark. It measures the excess return of a portfolio over its benchmark divided by the portfolio's tracking error.

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    What is Net Exposure in a Global Arbitrage Fund?

    Net exposure in a global arbitrage fund is typically close to zero because it involves simultaneously buying and selling similar assets in different markets. This helps to minimize risk by offsetting potential losses in one market with gains in another.

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    What is Value at Risk (VaR)?

    Value at Risk (VaR) quantifies the potential loss on an investment under normal market conditions over a specific time period. It helps to assess the maximum possible loss an investor could experience within a given probability.

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    What are Spreads in Global Arbitrage?

    Spreads are the price differences between similar assets traded in different markets. Even if spreads fluctuate temporarily, they typically converge at the end of the month, meaning their price differences will disappear.

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    What is a Commodity Pool Operator (CPO)?

    A commodity pool operator (CPO) manages funds pooled from multiple investors, investing primarily in commodities like gold or oil. A CPO needs regulatory approval to access US investor funds.

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    Why are Regulatory Approvals Needed?

    Regulatory approvals from a commodity pool operator and regulation perspective are required to access U.S. investor funds. This ensures the fund meets specific standards and safeguards investor interests.

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    Why did the Company's Revenue Decrease?

    The company's revenue decreased by 50% compared to the previous quarter, possibly due to market conditions or a change in investment strategies. The company may provide further details in an investor call or report.

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    Study Notes

    Abans Holdings Limited Q4-FY24 Earnings Conference Call

    • Date: May 15, 2024
    • Moderator: Purvangi Jain (Valorem Advisors)
    • Management Present: Abhishek Bansal (Chairman & MD), Chintan Mehta (CEO), Nirbhay Vassa (CFO), Ketur Shah (Assistant VP)
    • Company Description: A diversified financial services company with operations in India, UK, Dubai and Mauritius. Focuses on asset management, financial lending, treasury operations, and remittances.

    Financial Highlights (FY24)

    • Revenue: Rs. 1,378 Crores (18.5% YoY growth)
    • EBITDA: Rs. 150 Crores (74% YoY growth)
    • EBITDA Margin: ~11%
    • Net Profit: Rs. 89 Crores (27% YoY growth)
    • PAT Margin: ~6.5%
    • AUM: Rs. 2,500 Crores (from Rs. 1,665 Crores in March 2023)
    • Growth Drivers: Global arbitrage fund (Mauritius), alternative investment funds, acquisition of a PMS (Portfolio Management Services), and asset management business expansion.
    • EBIT: Increased from Rs. 21 Crores to Rs. 59 Crores YoY due to asset management focus

    Key Business Segments

    • Agency Business: Multi-asset global institutional trading (equities, commodities, and currencies)
    • Finance Business: Lending services (secured and unsecured term financing to individuals and SMEs)
    • Capital Business: Multi-national financial services.

    Management Expectations (FY25-26)

    • Growth: Focus on fee-based income (75%).
    • Asset Under Management (AUM): Expect continued, likely 8% or greater dollar-term return growth.

    Regulatory Approvals & Expansion

    • SEBI Approval: Received approval to operate as an investment manager for alternative investment funds in India.
    • Global Expansion: Aiming to expand global arbitrage fund to the US market.
    • Commodity ETF: Applications submitted for relevant licences (mutual fund & ETF).

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    Join us for the Abans Holdings Limited Q4-FY24 Earnings Conference Call, where key management will present the financial highlights and discuss the growth areas. Learn about revenue growth, EBITDA achievements, and strategic acquisitions that are driving the company forward in the financial services sector.

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