Rs 745 crore fresh issue: Anand Rathi Share & Stock Brokers’ shares up 7.87 per cent above the issue price of Rs 414 per share

On Tuesday, shares of Anand Rathi Share & Stock Brokers Limited (ARSSBL) marked their debut on stock exchanges, that is, BSE and NSE. On BSE, the stock is listed at Rs 446.60 per share and on NSE, the stock is listed at Rs 446.85 per share. The IPO was oversubscribed 21.83 times overall. The QIB portion saw the highest subscription at 46.25 times, followed by retail investors at 511 times and Non-Institutional Buyers (NIIs) at 30.16 times.

Anand Rathi Share & Stock Brokers IPO and Business Overview

Anand Rathi Share & Stock Brokers Limited (ARSSBL), incorporated in 1991, is a full-service brokerage firm offering broking, research, and mutual fund distribution through an offline network of 60+ branches alongside online services. The company is raising Rs 745 crore solely through a Fresh Issue of shares. The IPO has a Price Band of Rs 393 – Rs 414 per share, with a minimum investment of Rs 14,904 (36 shares). The funds from the issue, specifically Rs 550 crore, are primarily designated for meeting long-term working capital requirements, with the remaining balance allocated to general corporate purposes.

Financial Performance and Market Growth

ARSSBL has demonstrated strong financial growth, leveraging the rising financialization in the Indian market. Revenue from Operations has increased significantly, from Rs 467.83 crore in FY23 to Rs 845.70 crore in FY25, representing a CAGR of 34.45 per cent. This growth has been accompanied by expanding margins, with the Net Profit Margin improving from 8.07 per cent to 12.25 per cent over the same period, leading to a Net Profit of Rs 103.61 crore in FY25. The company operates in a large and growing Total Addressable Market for broking/related fees, estimated at Rs 52,000 crore, which is projected to grow at a strong 16–18 per cent CAGR through FY2030.

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Valuation and Key Considerations

At the cap price, the IPO is valued at an implied P/E of approximately 18.4x based on FY25 diluted EPS. This places the company at a slight discount compared to peers like Angel One (20x P/E) and competitive with Motilal Oswal Financial Services (20.7x P/E). A key strength is the company’s cash generation, with Cash Flow from Operations (CFO) growing to Rs 691.81 crore in FY25. However, post-issue, the Return on Equity (ROE) is projected to moderate to 8.3 per cent, which is weaker than its key listed competitors. While the full-service model and high Average Revenue per Client (ARPC) are significant strengths, the company must manage rising working-capital intensity, which is driven by its Margin Trading Facility (MTF) book.

Disclaimer: The article is for informational purposes only and not investment advice.