MUMBAI: Shares of Anand Rathi Wealth started with a strong opening in the stock markets on Tuesday. Non-bank wealth resolution firm was listed 600, 9% above its issue price 550.
The Initial Public Offering (IPO) of Rs.660 crore was subscribed 9.78 times in the price band of Rs. 530-550.
The IPO is valued at 51 times FY11 earnings and 9.5 times FY2011 book value, at a significant premium to its listed peer IIFL Wealth Management, said Vikas Jain, Analyst, Reliance Securities from the issue. last state.
“Considering the Superior Asset Under Management (AUM) book (2 times of IIFL Wealth), Income Yield and Return Ratio, we believe the premium valuation is reasonable and the IPO has a fair value. However, in the medium term, In perspective, limited gains can be expected here, as incremental price increases may be possible only with the stability of strong performance in the coming quarters,” Jain said.
Anand Rathi acts as a Mutual Fund Distributor registered with AMFI. It distributes mutual fund schemes managed by the AMC and earns distribution commission on a trail basis from the AMC. The company is presently present in 11 cities of India like Mumbai, Bengaluru, Delhi, Hyderabad, Kolkata, Chennai, Pune, Chandigarh, Jodhpur, Noida.
“Given the fundamentals and growth potential, the valuation of the company seems reasonable, as at the upper end of the price band, the company is valued at 7.5% AUM and 18.7 times EPS (Yearly FY22E). ICICIDirect Research said closest listed peer IIFL Wealth has over Rs 2.2 lakh crore in AUM and trading at 25xFY22E (consensus) also offers healthy growth potential.
As of August, its private assets catered to 6,564 active client families. Focuses on HNI segment with vertical AUM potential 5- 50 crores.
AUM of 30209 crore includes mutual fund schemes and other financial products such as bonds, MLDs and other securities held by clients. Its personal asset AUM has grown at a CAGR of 22.47 per cent from Rs 18037 crore as on March 31, 2019 29472 crore as on March 31, 2021.
it generated revenue of 279.2 crore and net profit 45.1 crore with a profit margin of 16.2% in FY2011 and 30.3% for the five months ended August 31, 2021.
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