Angel Broking IPO that opens on September 22 and ends on September 24 will be the eighth public issue to hit the market this year.
Angel Broking, one of the largest retail broking houses in India, will open its maiden public issue for subscription on September 22.
It would be eighth IPO this year to hit Dalal Street after SBI Card, Rossari Biotech, Mindspace Business Parks REIT, Happiest Minds Technologies, Route Mobile, Computer Age Management Services and Chemon Speciality Chemicals.
The public offer will close on September 24. Equity shares are proposed to be listed on BSE as well as National Stock Exchange.
ICICI Securities, Edelweiss Financial Services and SBI Capital Markets are the book running lead managers to the offer.
Here are 10 key things you should know before subscribing to the public issue:
1) About the Angel Broking IPO
The Rs 600-crore initial public offering consists of a fresh issue of Rs 300 crore and an offer for sale of Rs 300 crore.
The offer for sale comprises Rs 18.33 crore worth of shares selling by promoter Ashok D Thakkar, Rs 4.5 crore by another promoter Sunita A Magnani, Rs 120 crore by investor IFC and Rs 157.16 crore by an individual selling shareholder.
Bids can be made for a minimum of 49 equity shares and in multiples of 49 equity shares thereafter.
2) Angel Broking IPO Price Band
Company in consultation with merchant bankers has fixed issue price at Rs 305-306 per equity share.
3) Objects of Offer
Net proceeds from the fresh issue will be utilised for working capital requirements and general corporate purposes, while the company will not receive any proceeds from the offer for sale.
4) Company Profile
Company is one of the largest retail broking houses in India in terms of active clients on NSE as of June 2020 (Source: CRISIL Report). It is a technology-led financial services company providing broking and advisory services, margin funding, loans against shares (through one of the subsidiaries AFPL) and financial products distribution to clients under the brand Angel Broking.
The company provides broking and allied services through (i) online and digital platforms, and (ii) network of over 11,000 authorised persons as of June 2020. Company managed Rs 13,254 crore in client assets and over 21.5 lakh operational broking accounts as of June 2020.
The company grows its retail broking, margin funding and distribution businesses through online and digital platforms, Angel Broking Mobile App, trade.angelbroking.com, Angel SpeedPro, Angel BEE, which are powered by ARQ, a rule-based investment engine. Company is a member of BSE, NSE, MSEI, MCX and NCDEX.
Angel Broking has three group companies - Angel Insurance Brokers and Advisors, Jack & Jill Apparel and Nirwan Monetary Services.
The company has consistently paid a dividend during FY16 to FY20 and the latest in July 2020, it announced 12.10% dividend against face value of Rs 10.
5) Angel Broking Strengths>> One of the largest retail broking houses with strong brand equity;
>> Client acquisition through diversified digital platforms;
>> Integrated, end-to-end, and advanced digital experience ensuring client satisfaction;
>> Diversified product offering across segments at a competitive price;
>> Robust business metrics building operating leverage;
>> Experienced management team with proven execution capabilities.
6) Business Strategies>> Strengthen leadership position to become the largest retail broking business in India;
>> Augment investment in the mobile platform, artificial intelligence, machine learning capabilities and newer technologies;
>> Establish a leadership position in the investment advisory space to support our business;
>> Capitalisation of the growing investable wealth in India;
7) Financials and Peers
Angel Broking has reported a 3.6 percent fall in revenue at Rs 710.5 crore in FY20 compared to the previous year, and revenue in Q1FY21 stood at Rs 236.1 crore. Profit grew by 12.9 percent YoY to Rs 86.6 crore in FY20 and in Q1FY21, it was at Rs 38.2 crore.
In FY20, the company reported EBITDA of Rs 154 crore with margin at 22 percent due to healthy average daily turnover (ADTO) growth (led by flat brokerage) and controlled operating expenses.
Brokerage business accounted for 69.54 percent of the total revenue, while the balance 30.46 percent business to revenue contributed by lending activities, income from depository operations, portfolio management services, income from distribution, and other activities.
The company increased its client base by 36.81 percent CAGR from 10.6 lakh in FY18 to 21.5 lakh as on June 2020. In the three months period ending June 2020, company witnessed an average monthly client addition of approximately 1,15,565 clients, over a monthly average of 46,676 clients in FY20 representing a growth of 147.59 percent. Over the last year, it has more than doubled overall turnover market share in the retail broking space in India.
The number of operational accounts increased from 10.6 lakh in March 2018 to 21.5 lakh in June 2020. It witnessed a 151.91 percent CAGR from FY18 until the period ended June 2020 in average monthly net client addition run rate, against the broking industry growth of 43.63 percent CAGR. This led to a significant improvement in its market share in incremental demat accounts from FY18 (4.16 percent) until June 2020 (14.72 percent).
Company acquired 85.21 percent of clients digitally, of which, 53.31 percent are acquired through performance marketing, 20.72 percent through referrals from existing clients and approximately 11.18 percent through digital influencers. The remaining 14.79 percent of clients are acquired through network of authorised persons.
The company says ICICI Securities, Geojit Financial Services, IIFL Securities, Motilal Oswal Financial Services and JM Financial are its listed industry peers. It is the fourth largest broking house on the basis of active clients on the NSE, after Zerodha, ICICI Securities and RKSV.
8) Angel Broking Promoters
Dinesh D Thakkar, Ashok D Thakkar and Sunita A Magnani are the promoters of Angel Broking. As of September 15, promoters collectively held 2,07,18,725 equity shares, equivalent to 28.77 percent of the pre-offer paid-up equity capital of the company.
Dinesh D Thakkar is the Chairman and Managing Director of the company, who has over 25 years of experience in the broking industry.
Vinay Agrawal is Whole Time Director and Chief Executive Officer. He is a qualified Chartered Accountant from the Institute of Chartered Accountants of India. He has over 18 years of experience in the broking industry.
Uday Sankar Roy, Kamalji Sahay and Anisha Motwani are Independent Directors, while Ketan Shah is the Non-Executive Director.
Promoters and promoter group held 55.20 percent equity stake in the company, including Dinesh D Thakkar's 23.29 percent stake, and the rest is held by the public as of September 15, the date of filing red herring prospectus with Sebi.
Equity shareholding of the 10 largest equity shareholders of the company: