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The total revenue for 5 months ending 31 Aug 2021 was Rs 168.90 crore and the Issuer posted a PAT of Rs 51.09 crore. There has been a substantial increase in its profitability margins in the 5 months when seen against its full-year FY21.
The revenues for FY 21 reduced by 17% to Rs 279.25 crore from Rs 336.41 crore in FY 20 on account of a fall in income from distribution of debt mutual funds as the clients shifted to liquidity funds due to fear of a crisis in markets due to the pandemic. PAT for FY21 reduced to Rs 45.1 crore from Rs 61.61 crore in FY20. The profitability margins have been strong throughout the last three fiscals.
The debt to equity ratio was 0.20x as of the end of FY21. Return on equity was 17.81%, 18.69%, 33.21%, and 47.15% respectively for 5 months ended 31st Aug 21, FY21 , FY20, and FY19 respectively.
Title | 31-Aug-21 | FY2021 | FY2020 | FY2019 |
Total Revenue | 168.9 | 279.25 | 336.41 | 284.19 |
PAT | 51.09 | 45.1 | 61.61 | 58.43 |
EBITDA | 75.71 | 83.78 | 111.31 | 105.48 |
Total Assets | 402.32 | 339.4 | 409.06 | 230.83 |
Cash generated from operations | 63.88 | 2.89 | 160.21 | 101.88 |
EBITDA Margin | 44.83% | 30.00% | 33.09% | 37.12% |
Net Margin | 30.25% | 16.15% | 18.31% | 20.56% |
The Issue is priced at 18.63x with annualized EPS of 12.30 as at end of 31st Aug 2021 calculated at the upper price band of Rs 550 per share. P/E is 50.09 with an EPS of 10.98 as of the end of FY21.IIFL is listed as the peer of the Issuer and peer P/E is 28.58. The P/BV is 7.98x at NAV of 68.91 as of the end of 31st Aug 2021 and peer P/BV is 4.64x.
Particulars | IIFL | Anand Rathi |
Face value per share | 2 | 5 |
Total income for FY 21 (Cr) | 1,659.02 | 279.25 |
EPS (as on 28 Nov 21) | 51.85 | 29.52 |
NAV per share | 321.77 | 68.91 |
Return on net worth | 13.06% | _ |
P/E (As on 28 Nov 21) | 28.58 | 18.63 |
P/B (As on 28 Nov 21) | 4.64 | 7.98 |
Indian wealth management market is on a growth path given India’s long-term economic prospects, positive demographics, rising income levels, and current low penetration. The market is currently largely focused mainly on the urban segment, leaving the untapped majority of the Indian population. One should also keep in mind that many investors also prefer to invest directly without depending on the fund houses.
Anand Rathi Wealth Management launches its IPO on 2nd Dec 2021. It is entirely an OFS amounting to Rs 660 crore. The price band is Rs 530-550 per share with a retail quota of 35%. One can invest with a minimum lot of 27 shares or Rs 14850. The Issue closes on 6th Dec and is expected to list on 14th Dec. 2021.
Anand Rathi Wealth management is focused on scaling a business by capitalizing on market opportunities and geographic expansion. The Issuer has a good financial history over the last three fiscals. The areas of concern are the presence of unlisted peers in the form of universal banks like Edelweiss, Kotak, Avendus, brokerage firms, and national distributors which also provide wealth management services that may affect its market share in the long run. Hence, considering all these factors, one may subscribe to this IPO for the short to medium term.
Review By CA Priyanka Choudhary on 24th Nov 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.