Started in 1995, ICICI Securities Limited is a leading technology-based securities firm in India that offers a wide range of financial services including brokerage, financial product distribution and investment banking and focuses on both retail and institutional clients. ICICI Sec is headquartered in Mumbai, and operate offices in India, the United States, Singapore and Oman. It's a part of the ICICI Group, one of the largest financial conglomerates in the country and promoted by ICICI Bank. Company is the largest equity broker in India since fiscal 2014 by brokerage revenue and active customers in equities on the National Stock Exchange. Retail brokerage business accounted for 90.5% of the revenue from its brokerage business (excluding income earned on our funds used in the brokerage business) in fiscal 2017. As of December 31, 2017, ICICIdirect had approximately 3.9 million operational accounts of whom 0.8 million had traded on NSE in the preceding 12 months. Since inception, company acquired a total of 4.6 million customers through this platform as of December 31, 2017. ICICIdirect platform provides customers with a seamless settlement process through a 3-in-1 account, which links its electronic brokerage platform with customers' savings bank and dematerialised accounts held with ICICI Bank. Company offers its retail customers a wide range of products and services in equities, derivatives and research, and also distributes various third-party products including mutual funds, insurance products, fixed deposits, loans, tax services and pension products. Company's retail brokerage and distribution businesses are supported by its nation wide network, consisting of over 200 of its own branches, over 2,600 branches of ICICI Bank and over 4,600 sub-brokers, authorised persons, independent financial associates and independent associates and 4,200 employees as at December 31,2017. Company also offers its customers a wide variety of advisory services, including financial planning, equity portfolio advisory, access to alternate investments, retirement planning and estate planning. Company's investment banking business offers equity capital markets services and other financial advisory services to corporate clients, the government and financial sponsors. Company's equity capital markets services include management of public equity offerings, share buybacks, tender offers and equity private placements. Company also provides its clients with financial advisory services in relation to domestic and cross-border mergers and acquisitions, private placements, and restructuring. On financial performance front, ICICI Sec has (on a consolidated basis) reported revenue/net profits of Rs. 705.84 cr. / Rs. 71.75 cr. (FY13), Rs. 812.26 cr. / Rs. 89.19 cr. (FY14), Rs. 1209.51 cr. / Rs. 293.87 cr. (FY15), Rs. 1124.58 cr. / Rs. 238.72 cr. (FY16) and Rs. 1404.23 cr. / Rs. 338.59 cr. (FY17). For upto Q3 of FY18, it has earned net profit of Rs. 399.09 cr. on revenue of Rs.1344.69 cr. Setback in FY16, its in line with general trends of the markets. Issue is priced at a P/BV of 25.05 based on its NAV of Rs. 20.76 (on consolidated basis) as on 31.12.17. For last three fiscals it has posted an average EPS of Rs. 9.25 and an average RoNW of 76.91%. If we annualise latest earnings and attribute it on post issue equity then asking price is at a P/E of 31 plus against industry average of 37 and its peers are Edelweiss Fin. (184), IIFL Holdings (137), JM Fin. (78), Motilal Oswal (133) and Geojit Fin. (42) as on 15.03.18. For last five fiscals, ICICI Sec has posted CAGR of 18.8% in revenue and 47.4% CAGR in PAT. For upto Q3, it has posted growth of 31.5% and 56.3% respectively. On BRLM's front, six merchant bankers associated with the offer have handled 55 public issues in the past three years out of which 14 issues closed below the issue price on listing date. As per financials, company's growth is very good, RoNW is 76.91% for last three fiscals and issue is priced at P/E of around 31 as per latest earnings. Company has reported CAGR of 18.8% in revenues and 47.4% in PAT. The financial savings environment in India has undergone a fundamental transformation in recent years and it will help companies in financial services business to grow at good pace. So we give SUBSCRIBE rating to this IPO with long term perspective.
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