Implicit support of Abans group and Abans Group’s strength
Abans group is a globally diversified organization engaged in Financial Services, Gold Refining, Jewellery, Commodities Trading, Agricultural Trading and Warehousing, Software Development and Real Estate. The group is founded by Mr. Abhishek Bansal who leads a global team of qualified people operating businesses from multiple locations including India, United Kingdom, Dubai, Shanghai, Hongkong, Mauritius and Singapore. Abans holdings provides all the necessary expertise and support to Abans Fintrade for its trading activities which is primarily why both Abans holdings and Abans fintrade have grown successfully over the last financial year. Abans holdings has grown effectively and efficiently as it can be observed in the growth of their profitability and networth. Abans holdings, PAT has grown from Rs 89 Cr. in FY24 to Rs 109 Cr. in FY25 where the networth has grown from Rs 921 Cr. in FY24 to Rs 1064 Cr. in FY25. In the same time period PAT has remained subdued, however there is significant growth in PAT and networth from FY23 to FY25. It is understood that Abans Holdings consolidated business profile will continue to support AFPL through its expertise of seasoned professionals managing its operations and established track record of operations.
Healthy Networth and Earning Profile
The networth has grown considerably from FY23 to FY25(Prov), demonstrated by steady progression, increasing from Rs 270.87 crore in FY23 to Rs 347.38 crore in FY25(Prov). Moreover, this growth is predominantly attributable to AFPL’s robust earnings profile from the proprietary book, with PAT transitioning from a loss of Rs 7.50 crore in FY23 to a profit of Rs 34.51 crore in FY25 (Prov). However, it is noteworthy that profitability experienced a slight decline from FY24 to FY25 (Prov.), with PAT decreasing from Rs 39.13 crore to Rs 34.51 crore in FY25 (Prov). This reduction is primarily linked to fluctuations in trading volumes during the year, which are not indicative of any fundamental deterioration in operational performance.
Increased operations of Gold Trading segment
The significant increase in operating revenue and costs for AFPL indicates that FY25 has been a period of heightened activity, driven by increased demand. This can be captured by the significant increase in operating revenue and while higher revenues reflect successful sales growth, the concomitant rise in operating costs—such as procurement expenses, logistics and compliance costs—suggests that the business is operating at a higher scale, which has strained profit margins in FY25. The persistently low margins highlight the intense competitive landscape and price-sensitive nature of the gold trading industry, where profit is often squeezed by fluctuations in gold prices, transaction costs, and regulatory compliance. This scenario underscores the importance of operational efficiency and cost management to sustain profitability amidst volatile market conditions, as revenue growth alone may not translate into improved margins without controlling underlying cost drivers.
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Risks involved in Trading activities
AFPL is also engaged in trading within the physical bullion and agricultural commodity markets, primarily dealing with local wholesalers and traders to hedge the group’s exposure to exchange-traded instruments. These physical transactions involve the purchase and sale of goods and are conducted with a limited number of counterparties. Notably, the top ten counterparties account for over 90% of the group’s total physical commodity transactions. While AFPL has maintained relationships with known and reputable counterparties, this concentrated exposure introduces a risk of over-dependence on a limited pool of trading partners. The inability to effectively manage and mitigate such counterparty risk could pose potential adverse impacts on the group’s operational stability and financial condition.
Additionally, AFPL employs hedging strategies within its proprietary trading operations to mitigate foreign exchange volatility. These strategies include the use of derivatives such as futures and options to implement mechanisms like cash-and-carry arbitrage. Cash-and-carry arbitrage involves purchasing an asset in the spot market and simultaneously selling its derivative in the futures market, capitalizing on pricing discrepancies between the two markets. The profit from this strategy is primarily determined by the purchase price of the underlying asset plus its associated carrying costs. While the acquisition cost of the underlying asset is certain, the total carrying costs are subject to variability, introducing a level of uncertainty. Nonetheless, such arbitrage strategies help mitigate trading risks to a certain extent by exploiting market inefficiencies. |
