Anand Rathi Share and Stock Brokers IPO Details: Launch Date, Share Price, Size & Review

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Business Profile of the Anand Rathi Share and Stock Brokers Limited

Having more than thirty years of expertise, Anand Rathi is a full-service brokerage business in India providing broking services, MTF facility, and financial product distribution under its brand name. The company serves a wide range of customers in retail, HNI, ultra-HNI, and institutions. The clientele ranges in age, with 84.86% of active clients as of Sep 30, 2024 being above 30 years of age.

Through its relationship with clients and presence on digital platforms, the company also offers third party financial products including schemes of mutual funds, alternative investment funds, structured products, corporate fixed deposits, non-convertible debenturies and bonds, and portfolio management services. Of peer sets, Anand Rathi had the highest average revenue per client (ARPC) in Fiscal 2024.

Should You Subscribe to Anand Rathi Share and Stock Brokers Limited IPO or Not

While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.

Highest ARPC amongst peer set

During FY24, company had the highest ARPC amongst its peers. This high ARPC is attributed to client vintage, average age profile of clients, and personalized client management approach. As of Sep 30, 2024, 60.06% of our Active Clients had a vintage of more than 3 years, while 48.23% had a vintage of more than 5 years. Their demographic profile includes clients aged 30–59 years and above, who typically have a higher investible corpus and require multiple product offerings and advise. As of Sep 30, 2024, 146,029 of Active Clients were above 30 years of age, with 84.86% of them being above 30 years of age.

Full service brokerage house

The company’s revenue from operations consists of broking and related services (Broking Segment) and non-broking services (margin trading facility and distribution of investment products). The company has been diversifying its offerings by increasing income from distribution of financial products, such as mutual funds. With people risings standards, more people enrolling for formal sector jobs, the mutual fund industry will continue to expand will rising investors base. The Non-Broking Segment’s revenue has outperformed the Broking Segment’s growth over the last three years, with a CAGR of 35.54%. AUM in the Non-Broking Segment has grown from Rs. 27,723.02 million to Rs. 49,045.90 million, representing a CAGR of 33.01%.

Pan India presence

As of September 30, 2024, the company offers broking and financial services through 90 branches, 1,123 authorized persons, and online and digital platforms to retail, high net worth individuals, ultra-high net worth individuals, and institutional clients. These platforms automate processes like on-boarding, report generation, and trade execution, allowing relationship managers to acquire and serve more clients. As can be seen table below, the company generate majority of their brokerage income from clients coming from offline channel like through dealers and authorised persons.

Future strategies

  • Strengthen market position by retaining clients and acquiring new clients with high disposable income, investible surplus, and savings.
  • Increase client wallet share through cross-selling varied investment solutions.
  • Substantially increase MTF Business to improve client stickiness, consolidate client investments..
  • Diversify investment solutions include broking and related services, margin funding facility, and distribution of investment products.

Segment contribution

As per the draft prospectus, Anand Rathi largest business vertical is broking Segment, contributing significantly to the revenue. The company also offers clients margin trading facilities to enable them to leverage their collaterals. The income from broking and related services is directly proportionate to trading volume and order size. With rising investors participation, comes stricter regulation. As per SEBI analysis, retail participants lost big chunk of their saving by trading in future and options. If the trend rises, the regulator may introduce stricter framework which might, directly affect brokers business. A decline in investor participation in equity markets, inability to maintain and grow the client base, or service levels not meeting client expectations could adversely affect the Broking and Margin Funding businesses.

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