Anand Rathi Wealth IPO Review

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Anand Rathi Wealth IPO

7.6

Company Background

7.5/10

Price Band

7.0/10

Financial Health

7.5/10

Industry Situation

8.0/10

IPO Proceeds Usage

8.0/10

Pros

  • Wide Range of Services
  • Different Customer Segments
  • Positive Financials

Cons

  • Competitive Space
  • Few Litigations Pending

Anand Rathi Wealth Services Limited Basic Details

Here is a quick overview of Anand Rathi Wealth IPO with specific data points:

 

Anand Rathi Wealth Services Limited Background

Anand Rathi Wealth Services Limited, a part of the Anand Rathi Group, is one of the leading and well known non-bank wealth management services firms in India.

The company provides advisory, distribution and technology solutions to its clients. The three main business verticals of the company consist of Private Wealth Management, Digital Wealth Management and Omni Financial Advisors.

Private Wealth Management vertical comprises of services related to wealth management to clients including assisting clients with their investments in different financial instruments.

Digital Wealth Management vertical helps the company to build a wealth management model for services to the mass affluent market.

Omni Financial Advisors platform is India’s leading tech platforms for IFAs.

This wealth services company is now coming up with an IPO in the next few days. In this detailed IPO review, we will be highlighting specific facts, figures and analysis based on which you can a decision on whether to go ahead with your investment in this IPO or not.

Anand Rathi Wealth Services Limited Management Information

Currently, there are 8 Directors on the Board of Anand Rathi Wealth Services Limited.

Mr Anand Rathi is the Chairman and Non – Executive Director of the company. He got his Chartered Accountant degree from ICAI and was a gold medalist. He was earlier associated with Aditya Birla Nuvo Limited. He also held the position of President in BSE and was a Director of Central Depository Services Limited.

Anand Rathi Wealth IPO Data Points

Anand Rathi Wealth IPO will open on (undisclosed) and close for subscription on (undisclosed).

The IPO size will be of (undisclosed) lakh Equity shares and the face value of each share will be ₹5. The price band has been set at ₹(undisclosed) per share.

The offer price includes a premium of ₹(undisclosed) and is (undisclosed) times the face value of the equity shares. The IPO size is expected to be up to ₹425 crores.

The offer consists of a fresh issue of up to (undisclosed) lakh equity shares aggregating up to ₹125 crores and an offer for sale of up to (undisclosed) lakh equity shares aggregating up to ₹300 crores by its selling shareholder, Anand Rathi Financial Services Limited.

The market lot size is of (undisclosed) equity shares and the shares will be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Pursuant to a resolution passed on February 3, 2018, the offer has been authorised by the Board of Directors and pursuant to a special resolution of the shareholders at the Extraordinary General Meeting held on March 3, 2018, the offer has been approved by them. The promoter selling shareholder approved the offer for sale on July 10, 2018.

Anand Rathi Wealth Financial Performance (Consolidated)

Total revenues of the company increased significantly from ₹42.55 crores in the financial year ended March 31, 2017, to ₹223.72 crores in the financial year ended March 31, 2017.

Here are the details:

 

The company showed a loss of ₹0.07 crores in fiscal 2017 which converted into a profit of ₹46.25 crores in fiscal 2018. The return on net worth of the company on a consolidated basis for the years ended March 31, 2018, and March 31, 2017, is 59.02%, -0.56%, respectively.

The net asset value or NAV per equity share in the year 2018 and 2017 is ₹29.15 and ₹4.99 respectively.

Anand Rathi Wealth IPO Objectives

The Anand Rathi Wealth IPO consists of two parts:

The proceeds from the offer for sale of equity shares will be given to the selling shareholders. Any proceeds from the offer for sale will not be received by the company for its operations.

The main objectives of the fresh issue of equity shares are as follows –

  • For buying and furnishing of office premises in and around Lower Parel situated at Mumbai in Maharashtra
  • For investing in equity stakes in subsidiaries “ARWMPL” and “ FIINFRA” for the purpose of up gradation and enhancement of software and other technology-related expenses
  • For meeting expenses related to the general corporate operations.

Other than the above-mentioned objectives, the company will also benefit in terms of enhanced corporate image, brand name and increased visibility through Anand Rathi Wealth IPO.

Anand Rathi Wealth IPO Events

In case you are looking to invest in this IPO, you need to know a few specific dates so that there is absolute clarity on what is going to happen when.

Here is a quick summary for your reference:

Filing of Draft Red Herring Prospectus (DRHP)September 24, 2018
Anchor ListTBA
IPO Open Date TBA
IPO Close DateTBA
Finalization of Basis of AllotmentTBA
Credit to Demat AccountsTBA
Listing at BSE and NSETBA

 

Anand Rathi Wealth IPO Recommendation

Before deciding whether to invest in the Anand Rathi Wealth IPO or not, let us discuss various aspects of the company’s business like its key strengths and risks.

One of the biggest strengths of the company is its ability to provide uncomplicated and holistic solutions for their clients for which they use standardised processes. Their highly standardised approach and focus on technology are the main reasons why they are able to serve different segments like ultra HNIs, HNIs, mass affluent population and retail individuals.

The company holds a strong financial position in this industry. It generated an operating free cash flow of ₹95.31 crore which is 189.83 per cent of the total comprehensive income of the company for fiscal 2018.

The company also equally focuses on improving work environment and culture in order to retain existing and hire new talent.

Companies’ Strategies for further growth and expansion using technology as well as brand building and marketing activities seem promising.

Now, let us discuss some of the risks related to the company.

One of the group companies called Anand Rathi commodities Limited is involved in a proceeding with SEBI. Any adverse result related to this concern may have an adverse impact on the business and financial health of the company.

The financial information provided in Draft Red Herring Prospectus (DRHP) does not fully reflect some strategic transactions done by the company because of which the company cannot provide a comparable historical performance of their business.

Dependence on relationship managers is another risk factor for the company because the industry in which the company operates is highly people-centric.  

Competition from banks and wealth management companies in this industry poses risk to the business and financial well being of the company.

The company operates in a well-regulated environment and the rules and regulations of the industry are subject to change. Any such changes may affect operations of the company.

The company was involved in chances of non-compliances and delays related to requirements under FEMA. The company, its subsidiaries, group companies, promoters, Directors, etc. are involved in certain legal proceedings pending at different levels and any adverse ruling in them may pose a risk to the overall profitability of the company.

After going through different considerable strengths and risks of the business, it can be said that investors may choose to subscribe to Anand Rathi Wealth IPO for long-term returns. At the short-term level, this IPO might not be able to provide favourable returns.

Nonetheless, we’d advise you to have a word with your broker or financial advisor before investing any money into this IPO.

In case you are interested in applying to this IPO, let us assist in taking the next steps forward.

Just fill in some basic details in the form below and a callback will be arranged for you:

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Anand Rathi Wealth IPO Advisors Information

Equirus Capital Private Limited and Jefferies India Private Limited are acting as Book Running Lead Manager to the issue. Link Intime India Private Limited is acting as the Registrar for the Anand Rathi Wealth IPO.

AZB & Partners is acting as legal advisor to Anand Rathi Wealth Services Limited as to Indian law. J. Sagar Associates is acting as legal advisor and Squire Patton Boggs Singapore LLP is acting as special international legal counsel to the book running lead manager.

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