Anand Rathi Share & Stock Brokers IPO: Full-Service Brokerage Riding India’s Financialisation – Should You Subscribe?

At a Glance

Company and Business Operations

Anand Rathi Share & Stock Brokers Limited, incorporated on November 22, 1991, is a full-service retail and HNI brokerage with research, depository, mutual fund distribution and related services. It is a member of NSE, BSE, MCX and NCDEX, serving clients via online, call-and-trade and an offline network of 60+ branches. The firm emphasises high Average Revenue per Client and margin trading facility, alongside distribution AUM. Subsidiaries (if any), research headcount and operating metrics are detailed in the peer and KPI sections of the RHP. The company positions itself against Indian listed brokers such as Angel One, Motilal Oswal, IIFL and Geojit

Industry Outlook

India’s retail broking and wealth intermediation industry benefits from rising financialisation, demat penetration and market participation. The RHP cites a sizeable Total Addressable Market for broking/related fees in India of about Rs 52,000 crore, with a projected growth of roughly 16–18 per cent CAGR through FY2030, supported by equity culture deepening, derivative activity and distribution products. Globally, digitisation and zero-commission trends reshape competition; however, Indian brokers retain pricing/mix via value-added services, research and margin funding. Regulatory upgrades (risk, margins, disclosures) increase compliance costs but improve trust and scale benefits for established platforms.

Objects of the Issue

• Fund long-term working capital requirements: Rs 550.00 crore
• General corporate purposes: balance of net proceeds

SWOT Analysis

• Strengths: Diversified full-service model across broking, MTF, and distribution; strong ARPC vs peers; healthy profitability and cash generation
• Weaknesses: Revenue sensitive to market volumes and sentiment; compliance and tech costs rising; working-capital intensity due to MTF
• Opportunities: Financialisation tailwinds, client addition, higher MTF book, cross-sell of distribution products; under-penetrated retail investing base
• Threats: Intense competition from low-cost digital brokers; regulatory changes on margins/exposures; economic slowdowns dampening activity.Financial Performance

Profit & Loss (Rs crore)

(Source: Company RHP)

Balance Sheet (Rs crore)

(Source: Company RHP)

Working Capital & Cash Position (Rs crore)

(Source: Company RHP)

Peer Comparison (Post-issue)

(Source: Screener.in and company RHP) (Note: Data as of September 22, 2025)

Outlook & Relative Valuation

ARSSBL operates in a structurally growing Indian broking market (TAM ~Rs 52,000 crore; 16–18 per cent CAGR to FY2030). Its mix of broking, MTF and distribution, plus the highest ARPC in the peer set, supports monetisation beyond pure discount pricing. FY25 revenue of Rs 845.70 crore and PAT of Rs 103.61 crore reflect operating leverage and cash-generative economics (FY25 CFO Rs 691.81 crore). On valuations, the IPO’s implied P/E is ~18.43x FY25 diluted EPS at the cap price—at a discount to Angel One and around Motilal Oswal levels—while offering improving margins and prudent leverage. Post-issue metrics like ROE may moderate due to equity infusion to 8.3 per cent weaker compared to peers, but growth visibility remains healthy given financialisation tailwinds and MTF scaling. Near term, subscription may track market sentiment; media notes highlight a fresh-issue focus with Rs 550 crore towards long-term working capital. Overall, the risk-reward appears balanced to positive.

Recommendation: Avoid for now. ARSSBL is a well-positioned full-service broker in a structurally growing market, supported by improving margins, healthy cash flows, and a prudent post-issue capital structure. While the valuation at ~18.43x FY25 EPS appears reasonable, more attractive peers are available at lower multiples. Also considering Key risks such as market-linked revenues and rising regulatory costs, we recommend avoiding.