The wealth management arm of Anand Rathi Financial Services and one of the leading non-bank wealth solutions firms in India, Anand Rathi Wealth, will launch its initial public offering (IPO) on December 2. The company has been ranked among the top three non-bank mutual fund distributors in the country by gross commissions earned in fiscal 2019, 2020 and 2021.
Here are 10 key things to know before subscribing to the public issue:
1 IPO dates
The offer will open for subscription on December 2 and the last date for subscribing to the offer is set for December 6.
2 Price band
The price band for the offer has been fixed at Rs 530-550 per share.
3 Offer details
The company aims to mobilise Rs 660 crore at the upper end of the price band through this offer.
The IPO is entirely an offer for sale of 1.2 crore equity shares by Anand Rathi Financial Services, Anand Rathi, Pradeep Gupta, Amit Rathi, Priti Gupta, Supriya Rathi, Rawal Family Trust acting through Rakesh Rawal, Jugal Mantri, and Feroze Azeez, as per the company's statement.
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Anand Rathi Financial Services would be selling up to 92.9 lakh shares, while others will be selling up to 3.75 lakh shares each.
The offer includes a reservation of 2.5 lakh equity shares for the company's employees who will get these shares at a discount of Rs 25 to the final issue price.
Half of the offer size is reserved for qualified institutional buyers, 15 percent for non-institutional investors and the remaining 35 percent of the offer for retail investors.
4 Objectives of the issue
The offer aims to reap the benefits of listing the equity shares on the bourses.
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5 Lot size and investor’s reserved portion
The minimum lot size is of 27 equity shares and in multiples of 27 equity shares thereafter. Retail investors can invest a minimum of Rs 14,850 for one lot and a maximum of Rs 1,93,050 for 13 lots.
6 Company profile and industry
The company offers a wide product portfolio of wealth solutions, financial products distribution and technology solutions to its clients primarily through its flagship private wealth (PW) vertical where it managed Rs 29,472 crore in assets under management (AUM) as on August 31, 2021. It catered to 6,564 active client families which were serviced by a team of 233 relationship managers.
As of August 2021, 54.69 percent of clients have been associated with the company for over three years, representing 73.55 percent of its total PW AUM.
The PW vertical has grown at a compound annual growth rate of 22.47 percent from Rs 18,037 crore as of March 31, 2019, to Rs 29,472 crore on August 31, 2021. In addition to the PW vertical, the company has two new-age technology-led business verticals: digital wealth (DW), a fintech extension addressing groups of individuals with financial assets between Rs 10 lakh and Rs 5 crore, and Omni Financial Advisors (OFA), through which the company provides a technology platform for independent financial advisors (IFAs) to service clients and grow business.
The company has its offices in 11 cities: Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Kolkata, Chennai, Pune, Chandigarh, Jodhpur and Noida. It also has a representative office in Dubai.
7 Financials
Anand Rathi Wealth reported a profit of Rs 45.09 crore in FY21, lower than the Rs 61.61 crore posted in the previous year. Revenue also declined to Rs 265.33 crore from Rs 331.83 crore over the same period. Profit for the five months ended August 2021 stood at Rs 51.08 crore on a revenue of Rs 166.92 crore.
Net margins for FY21 declined to 17 percent from 18.57 percent in the previous financial year. For the five months to August 31, 2021, however, net margins jumped to 30.6 percent
8 Key risks
The key to the company’s business is its team of relationship managers. Any loss of key personnel or the inability to attract or retain management personnel may adversely impact the business performance.
Its dependence on one of its group companies, Anand Rathi Global Finance Ltd (ARGFL), for its business related to structured products can pose a threat in case of some adversities faced by ARGFL.
The structured products business contributed about 63.21% to the overall revenue for the five months ended August 31, 2021. The contribution from this business stood at 59.23 percent and 66.10 percent for fiscal 2021 and 2020, respectively.
9 Promoters and management
The company is promoted by Anand Rathi, who is also the chairman and non-executive director. He has been associated with the company since March 18, 2005. Before that, he was with Aditya Birla Nuvo Ltd, the BSE (where he also held the position of president) and was one of the first directors of Central Depository Services Ltd.
Rakesh Rawal is the executive director and chief executive officer while Rajesh Kumar Bhutara is the chief financial officer and Ashish Chauhan the company secretary and compliance officer.
10 GMP, listing and allotment date
The grey market premium (GMP) for the IPO is currently at Rs 125 per share as per IPO Watch.
The share allotment will be finalised by December 9 and unsuccessful investors will get refunds in their bank accounts by December 10, while successful investors will get shares in their demat accounts by December 13.
The trading in the stock on the BSE and NSE will commence with effect from December 14.
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