Angel Broking is set to list on the bourses on October 5, the first day of the week. The issue price has been fixed at Rs 306 per share, the higher end of the price band.
Analysts expect the stock to start the first trading day with a discount to its issue price, given the muted revenue growth despite robust client additions, high valuations, highly competitive industry and a muted response to its public issue. The listing discount could be up to 15 percent, analysts said.
"I don't expect much action on listing day as it might not be able to impress investors after many IPOs (initial public offerings) have given good returns in this season," Gaurav Garg, Head of Research at CapitalVia Global Research told Moneycontrol.
Since the closing of the IPO, Angel Broking has been trading at a discount in the grey market. The Rs 600-crore public issue was subscribed 3.94 times during September 22-24.
Garg expects Angel Broking to list in the price range of Rs 260-280, which is roughly 8.5-15 percent down from the IPO price.
Manali Bhatia, Head-Research at Rudra Shares & Stock Brokers, said the stock should list at a discount of 2-5 percent, which would be around Rs 290-300 per share.
"Although the company is one of the largest retail broking houses in India in terms of active clients, it disappoints on the valuation front. Fundamentally, too, it is not attractive. The revenue has remained muted over years despite a robust client base growth at a CAGR of 36.81 percent during FY18 to FY21. The company has generated negative cash flow from operations during Q1FY21 and the ratios also do not look appealing," she said.
The broking industry had become highly competitive, Bhatia said. Besides, the entry of discount broking players could worry the growth story, she added.
Angel Broking would be the seventh main board listing since July, after Rossari Biotech, Mindspace Business Parks REIT, Route Mobile, Happiest Minds Technologies, Chemcon Speciality Chemicals and Computer Age Management Services which listed with a minimum 10 percent premium .Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.