Anand Rathi Wealth Limited is one of the leading non-bank wealth solutions firms in India and have been ranked amongst the top three non-bank mutual fund distributors in India by gross commission earned in FY 19, 20 and 21. They serve a wide spectrum of clients through a mix of wealth solutions, financial product distribution and technology solutions. They provide services primarily through the flagship Private Wealth ('PW') vertical where they manage Rs 194.72 billion in AuM as on August 31, 2021. The AuM is a sum of (i) all third-party assets that generate commissions or incomes, which could be upfront and/or on a trial basis and (ii) custody assets of the Clients. Company's AuM does not include the value of the promoter holdings in companies in the AuM even though they may be in the Anand Rathi Group's custody. Company commenced activities in Fiscal 2002 as an AMFI registered mutual fund distributor and have evolved into providing, well researched solutions to the Clients by facilitating investments in financial instruments through an objective driven process. As of August 31, 2021, PW vertical caters to 6564 active client families, serviced by a team of 233 RMs (including 8 RMs working on contractual basis). As on August 31, 2021, 54.69% of the Clients have been associated with them for over 3 years, representing 73.55% of the total PW AuM, which shows the strength in vintage of both clients and their AuM in the business. They are currently present across 11 cities in India, namely, Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Kolkata, Chennai, Pune, Chandigarh, Jodhpur and Noida and they have a representative office in Dubai.. Company has digitised the operational process, including opening of an account, client approvals and investment transactions and on-boarding process. This has led to cost efficiencies and making execution less cumbersome, more transparent and contributed to the growth of the Company. Company's Client engagement and marketing efforts have also significantly converted to digital with a move to a virtual process of meeting clients during the pandemic and conducting official meetings and training with multiple stakeholders. Moving to paperless documentation and operational process coupled with work from home model had fundamentally reduced the operating cost relating to stationery and printing costs, travel, business development and rental expenses. As per financial performance, Anand Rathi Wealth Limited has posted total income/net profits of Rs 284.18 Cr / Rs 58.21 Cr (FY19), Rs 336.41 Cr / Rs 60.55 Cr (FY20), Rs 279.24 Cr / Rs 45.41 Cr (FY21) and Rs 168.90 Cr / Rs 51.09 Cr (5M FY22). So company has posted zig-zag result and 5M FY22 result was exceptional like . They have posted an average EPS of Rs.12.81 and average RoNW of 28.33% for last 3 fiscals. Issue is priced at a P/BV of 7.98 as per NAV of 68.91 on 31.08.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 50.76 and if we annualise 5M FY22, then on fully diluted equity post issue P/E is 18.67 which looks fully priced. As per RHP, Comparison between listed peers are shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 30 IPOs in last three fiscals. From last 10 IPOs, one is opened below issue price and remaining are opened above issue on the day of listing. As of now, four are trading below issue price and other are trading above issue price. ( As on 30.11.21) As per financials, Anand Rathi Wealth Limited has shown zig-zag results, RoNW 18.68% and P/E is respectively 51 and 19 as per FY21 and annualised FY22 earnings. BHARAT is vastly unpenetrated for wealth and investment related products and has very high growth opportunities. Performance of BRLM is average. So we give NEUTRAL rating to this IPO and one may apply for nominal listing gains.
✍️ Post a Comment