Anand Rathi Wealth IPO continued to garner great response from investors on the second day of sale with strong interest from retail investors and Non-Institutional Investors (NII). The wealth management firm’s public issue sailed through on the first day of sale and the overall subscription reached 2.96 times till 4:30 PM on Friday. In the grey market too, shares of Anand Rathi Wealth were seeing strong interest from investors and trading at a healthy premium of Rs 125 per share to the IPO price of Rs 530-550 per share. Earlier in the week, the grey market premium was around Rs 100 per share. The Rs 660 crore IPO closes on Monday, December 6.
So far Qualified Institutional Buyers (QIB) have bid for the public issue 0.17 times while Non-Institutional Investors (NII) have subscribed to the issue 2.99 times. NIIs have bid for more than 52 lakh shares against 17.62 lakh on offer for them. Retail investors have subscribed their portion of the issue 4.68 times, bidding for nearly 2 crore equity shares of Anand Rathi Wealth, against 41 lakh on offer for them. Employees of the firm have subscribed to more than half their quota. With this, the overall subscription has touched 2.96 times the issue size.
What brokerages say
ICICI Direct – Subscribe
Analysts at ICICI Direct say Anand Rathi is a play on wealth management business where Ultra HNI segment is witnessing significant growth. “Given the fundamentals and growth potential, valuation looks reasonable, at the upper end of the price band, the company is valued at ~7.5% AUM and ~18.7x EPS (annualised FY22E). The closest listed peer IIFL Wealth has over Rs 2.2 lakh crore in AUM and trading at 25xFY22E (consensus) offers healthy growth potential too,” they added
Marwadi Financial Services – Subscribe
The brokerage firm has assigned a ‘Subscribe’ rating to the IPO as the company is one of the leading non-bank mutual fund distributors in India with a presence in Non-Convertible Market Linked Debentures as well. Analysts said that the issue is available at reasonable valuations when compared to its peer. Marwadi Financial Services said that considering the FY-22 annualized EPS of Rs 29.46 on a post-issue basis, the company is going to list at a P/E of 18.67x.
Nirmal Bang – Subscribe
Analysts at Nirmal Bang highlighted that ROE of Anand Rathi Wealth has consistently been higher than peers like IIFL Wealth and Edelweiss Wealth. “ At valuations of 18.7x Apr-Aug’21 annualized earnings, ARW does offer some scope for upside on the listing, given ~20% earnings CAGR potential in the longer term combined with cross cycle ROE range of 20-30%. We recommend subscribing to the issue,” they added.