SPA Securities advised subscribing to the issue for long-term gains.
The Rs 600-crore initial public offering (IPO) of Angel Broking has been subscribed 76.5 percent so far on September 22, the first day of bidding.
The IPO of the fourth largest broking house in terms of active clients,has received bids for 1.05 crore equity shares against the offer size of 1.37 crore equity shares (excluding anchor book), the data available on exchanges showed.
Retail investors seem to be backing the IPO as they put in 1.45 times bids against its reserved portion, and that of non-institutional investors 16.2 percent, but qualified institutional buyers have not started bidding yet.
Angel Broking, ahead of its public issue, raised Rs 180 crore from 12 anchor investors including marquee names such as Goldman Sachs India, HDFC MF, Macquarie, Invesco Trustee, ICICI Prudential etc, at the higher end of the price band of Rs 305-306 per share.
The public issue comprises a fresh issue of Rs 300 crore and an offer for sale of Rs 300 crore by promoters and investors. The company will utilise fresh issue proceeds towards working capital requirements and general corporate purposes.
Angel Broking provides broking and allied services through online and digital platforms and it has a network of over 11,000 authorised persons.
"Angel has been able to retain and improve on its position given itd digital and distribution edge even in the era of the advent of new-age discount brokerages. The issue price discounts FY20 earnings by 25.4x while for FY21 the discount rate is around 18x on diluted equity capital, the issue price implies a P/B multiple of 2.63 on diluted equity capital," said SPA Securities.
The company managed Rs 13,254 crore in client assets and over 21.5 lakh operational broking accounts.
"Client additions saw a volume uptick (post-pandemic) but there is a possibility of the same cooling off for some quarters and the ability of the company to wade through these tiles will be tested," said SPA.