Anand Rathi Wealth Limited IPO Review

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Anand Rathi wealth limited is the wealth management backbone of the Parent company Anand Rathi Financial Services. It is one of the major non-banking solutions providing firms in the country. It is also amongst the top three companies in the mutual fund distribution business. In this article, we take a closer look at the Anand Rathi IPO Review and its possible future prospects. 

The company carries out its business through its Private Wealth vertical. Through this, Anand Rathi Wealth provides services of financial product distribution, wealth solutions and technology solutions.

Anand Rathi Wealth Limited is an HNI oriented company. It started its business operation in 2002 as an AMFI. The company initially started its operation as a mutual fund distributor and, in progress, transformed itself as a company providing multiple financial solutions.

Currently, the company has an active client base of 6109 clients that are catered by a team of 233 Relation Managers. The company currently has offices in 11 cities and one office in Dubai. The Anand Rathi Wealth management service carries out its business operation of technological solutions through OFA, Omni Financial Advisors and DFA, Digital Wealth Financial Advisors. The company operates via:

Private Wealth ManagementUnder this category, the company provided wealth management solutions to their clients via facilitating their investments in mutual funds, equity derivatives, debentures, and structured products.  
Digital Wealth ManagementUnder this business operation, the company provides services to build a financial model that is economic and feasible.  
Omni Financial AdvisorsIt is India’s major tech platform of IFA.  

OBJECTS OF THE IPO ISSUE:

  • Prepayment of all or significant part of the loan on the company on a consolidated basis.
  • To accomplish corporate targets.

BASIS OF THE ANAND RATHI WEALTH IPO OFFER:

  • The company plans to increase their exposure in the HNI sector. The sector is less price-conscious and highly underserved.
  • Anand Rathi has a reputation for providing clients with a simple, solutions-centred, and highly comprehensive objective-driven strategy.
  • It is a Non-banking Institution and one of the top three mutual fund distributors highly renowned in India due to its past track record.
  • The company has a strong market share in the structured products sector.
  • The company also provides Value-added services, which includes safety and estate preparation.
  • The company has developed an innovative work culture that helps them drive a unique strategy for carrying out their business operation and gain financial profitability and appropriate margins.
  • The company has a PAN India presence due to its special Marketing Initiatives.
  • Anand Rathi Wealth Limited, a mutual fund distributor, is backed by a strong promoter base and an excellent board of directors and management.

ALSO READ: RATEGAIN TECHNOLOGIES IPO

ANAND RATHI WEALTH IPO:

Anand Rathi Wealth Limited, a financial company, has its headquarters in Mumbai. The company has recently submitted its DRHP and is waiting for approval from SEBI to float its IPO in the market. The IPO has been brought forward as per the DRHP will be a purely OFS based IPO. 

Through the OFS, the selling stakeholders will offload a total of 12,000,000 equity shares, which will correspond to Rs.1000 Crore. No Issue of fresh equity will be there in the IPO. The company in 2018 also got approval from SEBI for their IPO, but they dropped the plan considering the tough market scenario at that time.

The selling stakeholders are as follows:

Anand Rathi Financial Services92.85 lakh equity shares
Anand Rathi3.75 lakh equity shares
Pradeep Gupta3.75 lakh equity shares
Priti Gupta3.75 lakh equity shares
Supriya Rathi3.75 lakh equity shares
Rawal Family Trust3.75 lakh equity shares
Feroze Azeez3.75 lakh equity shares
Jugal Mantri90,000 equity shares
IPO Opening Date Dec 2, 2021
IPO Closing Date Dec 6, 2021
Issue TypeBook Building Type
Face ValueRs.5/ Equity Share
IPO Price ₹530 to ₹550 per equity share
Market Lot 27 Shares
Min Order Quantity 27 Shares
Listing AtBSE, NSE
Issue SizeRs.1000 Crore
Fresh Issue0
Offer for Sale12,000,000 Equity Shares corresponding to Rs.1000 Crore
Basis of Allotment Date Dec 9, 2021
Initiation of Refunds Dec 10, 2021
The Credit of Shares to Demat Account Dec 13, 2021
IPO Listing Date Dec 14, 2021
Basis of Allotment Type% Of the Allotment of the IPO Offer
Qualified Institutional Buyer50
Non-Institutional Investor15
Retail35

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ParticularsFor the year with amount in Crores
31-Mar-2131-Mar-2031-Mar-19
Total Assets339.44409.06230.83
Total Revenue279.25336.41284.19
Profit After Tax45.1161.6158.43
PARAMETERMARCH 21MARCH 20YoY %
   Earnings Per Share (Rs)16.3922.71-27.84
   Book NAV/Share (Rs)86.1068.6325.46
   Core EBITDA Margin (%)26.3332.16-18.12
   EBIT Margin (%)25.0627.20-7.86
   Pre-Tax Margin (%)23.9726.21-8.54
   PAT Margin (%)17.0018.57-8.44
   Cash Profit Margin (%)23.5224.91-5.59
   ROA (%)12.2119.56-37.56
   ROE (%)21.3639.83-46.37
   ROCE (%)26.5051.31-48.36
   Asset Turnover(x)0.721.05-31.81
   Sales/Fixed Asset(x)2.293.38-32.23
   Working Capital/Sales(x)6.61-35.61118.57
   Fixed Capital/Sales(x)0.440.3047.56
   Net Sales Growth (%)-20.0419.97-200.34
   Core EBITDA Growth (%)-24.725.52-547.49
   EBIT Growth (%)-26.321.17-2340.85
   PAT Growth (%)-26.795.44-592.04
   EPS Growth (%)-27.843.22-965.09
   Total Debt/Equity(x)0.140.23-37.42
   Current Ratio(x)1.740.9484.98
   Quick Ratio(x)1.740.9583.70
   Interest Cover(x)22.9527.38-16.21

PEER COMPETITION:

COMPANYTOTAL INCOMERONWNAV
ANAND RATHI WEALTH LIMITED1659 Crores18.69%Rs. 58.47 per equity share
IIFL WEALTH MANAGEMENT279 Crores13.06%Rs. 321.77 per equity share

WEAKNESS AND THREATS OF ANAND RATHI WEALTH IPO:

  • COVID-19 pandemic has hit the business operation along with the financial parameters of the company. During this period, the company’s profit and revenue dropped significantly due to business disruptions, a crash in the stock market and a decrease in the positive sentiment of new investments.
  • The company’s financial parameters, mainly margin and revenue and financial product distribution, depend on their AUM growth, the performance of the mutual funds being distributed by them, and the effectiveness of the funds they distribute. Any regulatory changes that can lead to changes in the expense ratio will impact the company’s income.
  • The company needs to follow strict guidelines, regulatory standards. Any Non-compliance or observation of the legal standards by the regulatory body will hurt the organization’s business.
  • Anand Rathi has huge exposure in the rich segment profile category. Also, it has high exposure in Tier 1 regions. It restricts the reach of the company to other regions from where they can expand their client base.
  • The company’s other challenge is to maintain an adequate capital position and register an increase in scale.
  • The company is engaged in a highly competitive sector where it faces competition from many organized and unorganized players. 
  • Any ineffective by the firm regarding the mutual fund distribution can lead to the cancellation on behalf of the AMC.
  • Annand Rathi is currently facing trial due to legal procedures against the company, promoters, board of directors and its group company. Any negative news on this front could lead to a detrimental impact on the brand value of the Anand Rathi Group.
  • The company is vulnerable to breach in Cyber Security and Database Mismanagement. 
  • The company operates on a Monoline resource profile. The biggest threat to the company is the funding of their AUM. The AUM of the company is funded by hedged and secured market linked debentures. Any volatility in the market price of these debentures (equity, equity mutual fund, real estate) will have a significant 

STRENGTHS AND GROWTH ASPECTS OF ANAND RATHI WEALTH IPO:

  • Anand Rathi Wealth Limited’s major aim has been to improve the manager’s relationship and expand the network by appointing more managers to enhance business growth.
  • The company in the past has shown a good track record in capitalizing on the current opportunities in the market, which helped them expand their geographical reach.
  • The unique marketing strategy and brand building campaign have helped the Anand Rathi Group enhance its brand value.
  • The company’s AUM under Private Wealth has grown at a CAGR of 20.17% in the last two years. Currently, the company value the private wealth AUM about Rs. 26,058 crores.
  • The strong pedigree of the promoters and investors of the company is a major reason for the company outperforming other companies in its sector of business operation.
  • The company follows an adequate risk management practice. It also has a very good financial risk profile considering the company is suspected of the volatility of the financial market for its AUM. The majority of the company’s investment is in Government Securities, which enables the company to maintain very good liquidity.
  • Anand Rathi Wealth Limited has registered a growing scale of operations.
  • The company has recently added new services to increase diversity in its service and product profile.
  • The loan assets of the company have increased with a CAGR of 29% in the last 2 years.
  • Anand Rathi Wealth Limited trusts its client base as more than 50% of its clients have been associated with the company for more than 3 years. These clients’ accounts for 72.19 per cent of the total Private Wealth AUM of the company.
  • The company has an excellent leveraging process and strategy to grab the opportunities in the market for their clients.
  • Anand Rathi Wealth Limited has strong financial, operational and Business Metrics.
  • The company will also benefit from the growth of the sector. The Indian Equity Market is expected to become the fourth largest market on the global level. The whole sector will see an increase and rise of the sector by a CAGR of 14.27%.

Also Read : List of Mainboard IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.

PROMOTERS:

  • Mr Anand Rathi
  • Mr Pradeep Gupta
  • Anand Rathi Financial Services Limited
Pre-Issue Share Holding61.45%
Post Issue Share Holding

CONTACT DETAILS:

Anand Rathi Wealth Limited

Express Zone, A Wing, 10th Floor, Western Express Highway,

Goregaon (E), Mumbai 400 063, Maharashtra, India

Telephone: +91 (22) 6281 7000

E-mail: csarwsl@rathi.com

Website: www.rathi.com/wealth

REGISTRAR:

Link Intime India Private Limited

C-101, 1st Floor, 247 Park,

Lal Bahadur Shastri Marg,

Vikhroli (West),

Mumbai 400 083, Maharashtra, India

Telephone: +91 22 4918 6000

E-mail: anandrathi.ipo@linkintime.co.in

Website: www.linkintime.co.in

LEAD MANAGER(S):

  • Equirus Capital Private Limited
  • BNP Paribas
  • IIFL Securities Limited
  • Anand Rathi Advisors Limited

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