Anand Rathi Group’s Brokerage Arm Refiles DRHP for ₹745 Crore IPO
Anand Rathi Share and Stock Brokers Ltd, the brokerage arm of the Anand Rathi Group, has taken a significant step towards its Initial Public Offering (IPO) by refiling its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company aims to raise over ₹745 crore through this IPO, which is poised to enhance its capital base and support its growth trajectory.
Background of the IPO
The initial filing of the DRHP occurred in December 2024, marking the company’s first foray into the public market. The upcoming IPO will feature a face value of ₹5 per share, consisting entirely of a fresh issue of shares amounting to ₹745 crore. This strategic move is designed to bolster the company’s financial standing and expand its operational capabilities.
In a noteworthy aspect of the offering, Anand Rathi may explore a Pre-IPO placement of specified securities totaling up to ₹149 crore. Should this placement occur, the amount raised will be deducted from the fresh issue, allowing for a more streamlined capital raising process.
Utilization of Proceeds
The proceeds from the fresh issue are earmarked for various purposes, with a significant allocation of up to ₹550 crore directed towards supporting the company’s long-term working capital needs and general corporate purposes. This strategic allocation underscores Anand Rathi’s commitment to strengthening its financial foundation and enhancing its service offerings.
IPO Structure and Allocation
The IPO will be conducted via a book-building process, a method that allows for price discovery based on investor demand. A maximum of 50% of the net issue is reserved for qualified institutional buyers, while at least 15% and 35% of the net offer will be allocated to non-institutional and retail individual investors, respectively. Additionally, there are reserved subscriptions for eligible employees, ensuring that the offering is inclusive and accessible to a broad range of investors.
The book-running lead managers for the IPO include Nuvama Wealth Management Limited, DAM Capital Advisors Limited, and Anand Rathi Advisors Limited. MUFG Intime India Private Limited will serve as the registrar to the issue, facilitating a smooth and efficient process for investors. The equity shares are proposed to be listed on both the National Stock Exchange of India Limited and BSE Limited, providing investors with multiple avenues for trading.
Company Overview
Anand Rathi Share and Stock Brokers Limited is a prominent player in the financial services sector, offering a comprehensive range of services that include broking, margin trading, and the distribution of financial products under the well-recognized brand name ‘Anand Rathi.’ The company caters to a diverse clientele, encompassing retail investors, high-net-worth individuals (HNIs), ultra-HNIs, and institutional clients.
As of September 30, 2024, Anand Rathi operates through an extensive network of 90 branches across 54 cities in India. The company is supported by 1,123 Authorized Persons (agents approved by relevant stock exchanges) in 333 cities, ensuring a robust presence in both urban and rural markets. Its online and digital platforms further enhance its reach, allowing the company to serve clients across Tier 1, Tier 2, Tier 3, and other cities effectively.
Financial Performance
The financial performance of Anand Rathi Share and Stock Brokers has shown remarkable growth. Revenue from operations surged by 45.74% to ₹681.79 crore in fiscal 2024, up from ₹467.83 crore in fiscal 2023. This impressive growth can be attributed to an increase in interest income and fees and commission income. Additionally, the company reported a significant increase in profit after tax, which rose by 104.77% from ₹37.74 crore in fiscal 2023 to ₹77.29 crore in fiscal 2024.
For the six months ending September 30, 2024, the company reported revenue from operations of ₹441.72 crore and a profit after tax of ₹63.66 crore, indicating a strong performance trajectory.
Conclusion
The refiled DRHP for Anand Rathi Share and Stock Brokers Ltd’s IPO marks a pivotal moment for the company as it seeks to capitalize on its growth potential and enhance its market presence. With a robust operational framework, a diverse service offering, and a commitment to financial prudence, Anand Rathi is well-positioned to attract investor interest and achieve its capital-raising goals. As the IPO process unfolds, stakeholders and potential investors will be keenly watching the developments, eager to see how this established brokerage firm navigates its entry into the public market.
Disclaimer: This article is for educational purposes only. The views and recommendations expressed herein are those of individual analysts or broking companies and do not reflect the views of Mint. Investors are advised to consult certified experts before making any investment decisions.