ABS Marine Services has initiated its Initial Public Offering (IPO), valued at Rs 96.29 crores, as a book-built issue consisting solely of fresh shares amounting to 65.5 lakh. Commencing on May 10, 2024, the subscription for the IPO will run until May 15, 2024, with the final allotment expected to be confirmed on Thursday, May 16, 2024.

The IPO is slated to be listed on the NSE SME on Tuesday, May 21, 2024. The price band for the ABS Marine Services IPO is established at ₹140 to ₹147 per share, with a minimum lot size set at 1000 shares, necessitating a minimum investment of ₹147,000 for retail investors. High Net Worth Individuals (HNIs) are required to invest in a minimum of 2 lots, totaling 2,000 shares, amounting to ₹294,000.

GYR Capital Advisors Private Limited serves as the book running lead manager, while Purva Sharegistry India Pvt Ltd undertakes the role of registrar for the issue. Giriraj Stock Broking and Commodity Mandi act as the market makers for the ABS Marine Services IPO.

The Issue is a Fresh Issue of 65,50,000 Equity Shares, aggregating up to ₹96.29 Cr. by the Company

Company proposes to utilize the Net Proceeds towards:

1. Acquisition of off shore vessel
2. Funding the working capital requirements of our Company
3. General corporate purposes.

Company considers acquiring vessels when they believe there is a demand for vessels in a particular segment in the industry. They may, however, utilise the new vessels to increase fleet size or replace an existing vessel which may require replacement with a new one due to day to day wear and tear.

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About ABS Marine Limited

ABS Marine Services, a fully integrated company with in-house complete vessel management including commercial management. Company has fully owned, chartered-in, totally managed & crewed fleet includes state of the art DP-2 Multipurpose offshore Supply Vessels, Anchor Handling Towing Supply Vessel, multi-disciplinary Ocean Research Vessels, Coastal Research Vessels, Fishery Oceanographic Research Vessel, Bulk Carriers, Gas Tankers, Oil Tankers, Passenger Vessels, High Speed Crafts & Harbour Crafts.

Company started its operations with 2 offshore vessel management and now have 5 owned vessels (2 advanced offshore vessels servcing the Oil & Gas sector & 3 Harbour Crafts serving the Indian Ports) as of Dec’23.

In addition, as of December 31, 2023 company is carrying out total ship management of 12 vessels on behalf of Government, public sector undertakings, private companies and port authorities by providing crew management services to a further 24 ships comprising Oil Tankers, Gas Tankers, Bulk Carriers, Passenger Vessels and Hisgh Speed Crafts.

Major customers are Government of India, large industrial concerns, public sector undertakings, port authorities and private sector. The company has 10 strategic contracts with Governemnt agencies, one major of them with the Ministry of Earth and Science (MOES) contributes 23.50% towards the Revenue from operations.

India is strategically located on the world’s shipping routes with a coastline of approximately 7,517 km. As of 2021, India owns over 30% global market share in the ship breaking industry and is home to the largest ship-breaking facility in the world at Alang. 16th largest maritime country in the world contributing around 95% of the India’s trade by volume and 70% by value.

India is the 3rd largest globally in terms of ship recycling by tonnage. To promote India's shipping and port industry, the government has also introduced various fiscal and non-fiscal incentives for enterprises that develop, maintain and operate ports, inland waterways and shipbuilding in India.

Risk associated to the issue:

• Few clients contributes major revenue: During Fiscal 2024 Government customers provided 54% of the revenue, PSU’s supported 39% of revenue and rest holds 7%.
• Fluctuating operating costs: Operating costs may increase as vessels age and the company have to make unexpected capital expenditures in order to maintain fleet or comply with the evolving regulatory requirements.
• Limited Vessels: Limited availability of vessels for purchase in the secondary market at the right time and increase in purchase prices of vessels in the secondary market may affect financial condition.
• High Competition: Intense price competition, which could depress vessel day rates and utilization rates, thereby adversely affecting business and financial performance.