Anand Rathi, Pradeep Gupta and Anand Rathi Financial Services, together holding 61.45 per cent, are the promoters of the company. (Representative image)
Anand Rathi Wealth has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). This would be the eighth company to file IPO papers in July.
Here are 10 key things to know about the mutual fund distributor:
The company is planning an IPO of up to 1.2 crore equity shares, which is a complete offer for sale (OFS) by existing shareholders.
The OFS consists 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.
The company is expected to raise Rs 1,000 crore through the public issue, according to sources.
Objectives of the issue
Listing of equity shares will enhance the company's brand name and provide liquidity to existing shareholders. Since it is an OFS, the company will not receive any proceeds from the issue.
Anand Rathi Wealth is one of the leading non-banking wealth solutions firms in India and it has been ranked among the top three non-banking mutual fund distributors by gross commissions earned in FY20 (Source: CARE Advisory Research). The company provides services, primarily through its flagship Private Wealth vertical, which manages Rs 26,058 crore in assets under management (AUM), as on March 31, 2021.
The company commenced activities in FY02 as an AMFI-registered MF distributor and have evolved into providing well-researched solutions to clients by facilitating investments in financial instruments through an objective-driven process.
As of March 2021, the private wealth vertical caters to 6,109 active client families, serviced by a team of 233 relationship managers (including 8 relationship managers working on a contractual basis). As on March 2021, 52.33 percent clients have been associated with the company for over three years, representing 72.19 percent of the total private wealth of the AUM.
It is present in 11 cities, including Mumbai, Bengaluru, Delhi, Kolkata, Chennai, and Pune, and has a representative office in Dubai.
In addition to the private wealth vertical, the company has two new-age technology-led business verticals -- Digital Wealth and Omni Financial Advisors.
1. The private wealth vertical focuses on the under-served and the less price-sensitive high net worth individual (HNI) segment, with an AUM potential of Rs 5 crore - Rs 50 crore. These are HNIs who seek quality and value-addition, rather than low-cost solutions.
2. The company provides uncomplicated, holistic and standardised solutions to clients based on an objective-driven approach.
3. It is a top tier non-banking MF distributor, coupled with a presence in structured products.
4. Value-added services: As part of its holistic approach to clients, the company also facilitates estate planning, succession planning and creating wills as part of its core objectives, without charging any cost.
5. The company has a unique approach to attract and retain talent through an entrepreneurial work culture.
6. The company has a unique approach towards marketing initiatives.
a) The company aims to improve its relationship managers’ strengths and appoint more managers to generate maximum business.
b) It aims to focus on scaling business by capitalising current market opportunities and through geographic expansion.
c) The company intends to increase its brand recognition through various brand-building efforts, communication and promotional initiatives.
Anand Rathi Wealth recorded a consolidated profit of Rs 45.11 crore on revenues of Rs 265.33 crore for the year ended March 2021, and profit of Rs 61.61 crore on revenues of Rs 331.83 crore for the financial year 2019-2020. The profit for FY19 stood at Rs 58.43 crore on revenues of Rs 276.58 crore.
Private wealth AUM grew at a CAGR of 20.17 per cent from Rs 18,037 crore, as of March 2019, to Rs 26,058 crore on March 2021.
Anand Rathi Wealth compares itself with listed industry peer IIFL Wealth Management, which has a total income of Rs 1,659 crore, against the Rs 279.25 crore reported by the company.
The company has a return on net worth and net asset value (NAV) of 18.69 per cent and Rs 58.47 per equity share, against IIFL's 13.06 per cent and Rs 321.77 per equity share.
Promoters and Shareholding
Anand Rathi, Pradeep Gupta and Anand Rathi Financial Services, together holding 61.45 per cent, are the promoters of the company. The promoter group's shareholding stood at 13.51 per cent, taking the total stake of the promoters and the promoter group to 74.96 per cent.
The remaining 25.04 percent stake is held by public.
Promoter Group (other than Promoters)
Anand Rathi is the Chairman and Non-Executive Director of the company. Since completing his Chartered Accountancy over 50 years back, and prior to joining the company, he was with Aditya Birla Nuvo, and with the BSE (where he has also held the position of President) and was one of the first directors of the Central Depository Services.
Rakesh Rawal is an Executive Director and the Chief Executive Officer of the company. He holds a Bachelor of Technology degree in Mechanical Engineering from the Indian Institute of Technology, Kanpur, and a Master’s in Management Studies from Jamnalal Bajaj Institute of Management Studies. Prior to joining the company, he worked with Deutsche Bank and Hindustan Lever.
Pradeep Gupta and Amit Rathi are Non-Executive Directors. Mohan Tanksale, Ramesh Chandak, Kishan Gopal Somani, and Sudha Navandar are independent directors.
Rajesh Kumar Bhutara is the Chief Financial Officer of the company. He has been associated with Anand Rathi Group since August 8, 2000. He is a member of the Institute of Chartered Accountants of India. He also holds a Bachelor's Degree in Commerce from Jiwaji University, Gwalior.
BRLM and Listing
Equirus Capital, BNP Paribas, IIFL Securities, and Anand Rathi Advisors are the book-running lead managers to the issue.
The equity shares are proposed to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).