Anand Rathi Wealth has opened its initial public offering (IPO) today. The subsidiary of Mumbai-based financial services group Anand Rathi plans to raise Rs 660 crore at the upper end of the price band.
The issue will close on December 6. The share sale has a price band of Rs 530-550 per share.
On December 1, Anand Rathi raised Rs 194 crore from anchor investors, ahead of its initial share sale. The company has decided to allocate 35.25 lakh equity shares to 12 anchor investors at Rs 550 apiece, valuing the transaction size at Rs 194 crore.
BNP Paribas Arbitrage, Goldman Sachs Funds, Ashoka India Equity Investment Trust Plc, Kuber India Fund, SBI Mutual Fund (MF), ICICI Prudential MF, HDFC MF, Axis MF, Tata MF and Aditya Birla Sun Life MF are among the anchor investors.
The share sale is entirely an offer for sale (OFS) of 1.2 crore equity shares by promoters and existing shareholders.
The OFS consists of sale of 92.85 lakh equity shares by Anand Rathi Financial Services, and 3.75 lakh equity shares each by Anand Rathi, Pradeep Gupta, Amit Rathi, Priti Gupta, Supriya Rathi, Rawal Family Trust, and Feroze Azeez, and 90,000 equity shares by Jugal Mantri.
2.5 lakh equity shares have been reserved for employees. The IPO’s lot size is 27 shares for which one will have to spend Rs 14,850.
A retail-individual investor can apply for up to 13 lots or 351 shares by spending Rs 1,93,050.
The allotment of shares will be finalised on December 9, 2021 and the firm will make its debut on BSE and NSE on December 14.
The object of the offer is to achieve the benefits of listing the equity shares on the stock exchanges.
Anand Rathi Wealth is one of the leading non-bank wealth solutions firms in India. The company offers a wide product portfolio of wealth solutions, financial product distribution, and technology solutions to its clients.
Here’s a look at the stance of brokerages toward the IPO.
Marwadi Shares and Finance has given a subscribe call to the issue.
“Considering the FY-22 annualized earnings per share of Rs.29.46 on the post-issue basis, the company is going to list at a P/E of 18.67x with a market cap of Rs.22,889 mn, while its peer namely IIFL Wealth Management is trading at P/E of 24.59x (FY22 annualised). We assign a ‘Subscribe’ rating to this IPO as the company is one of the leading non-bank mutual fund distributors in India with a presence in Non-Convertible Market Linked Debentures as well. Also, it is available at reasonable valuations as compared to its peer,” the brokerage said.
Angel One is positive on the share sale.
“Anand Rathi Wealth might be a great investment option for individuals willing to dig into the benefits of mutual fund distributors. It belongs to the list of top-tier mutual fund distributors according to the gross commissions it earned in the previous financial year,” Angel One said. Willing investors must consider their investment goals and probable market risks before subscribing to the Anand Rathi Wealth IPO, it added.
Nirmal Bang has given a subscribe call to the Anand Rathi Wealth IPO.
“Although ARW’s FY19-21 growth in revenue and profits has lagged behind Edelweiss Wealth, its current year growth has been encouraging and above that of both its peers. At valuations of 18.7 times, the annualised April-August 2021 earnings, Anand Rathi Wealth does offer some scope for upside on the listing, given around an earnings CAGR potential of around 20 percent in the longer term combined with a cross cycle RoE range of 20-30 percent,” said Nirmal Bang.