Angel Broking’s IPO has opened for subscription on 22 September i.e. Tuesday. It can be subscribed till Thursday 24 September.
ET Intelligence Group: Angel Broking’s IPO has opened for subscription on September 22. It can be subscribed till Thursday 24 September. Analysts believe that investors may get listing gains from this issue, but its price is quite high.
According to analysts, after the company’s good performance in recent months, its pricing has been done aggressively. The valuation is much higher than its larger rival ICICI Securities and in such a situation the pressure of market risk and business cycle risk may increase.
The company wants to raise Rs 600 crore in the primary market, in which fresh shares worth Rs 300 crore will be issued. The company will offer 300 crore shares under the offer for sale. The company will use the income from this issue to meet the working capital requirements.
Business: In the
last three years, the company has increasingly started the digital business. The company offers about half of its broking services through an online platform. The company has benefited from the increasing penetration of smartphones, due to which it has regained its lost market share.
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Most of the customers of the company are retail businesses, out of which 90 percent customers come from Tier II and Tier III cities. The company has a network of 11,000 authorized people. The market share of retail equity turnover was 5.4 per cent in FY 2019-20, up from 3.2 per cent in FY 2017-18.
The company’s market share reached 8.2 percent in the June 2020 quarter due to better markets and growing retail business. The company’s share in the futures market and cash market was 5.1 per cent and 2.9 per cent respectively in FY 2019-20, which was 13.7 per cent and 8.5 per cent respectively in FY 2017-18.
financial health
under investigation of fraud of Rs 1,400 crores The total revenue of the company decreased from Rs 787 crores to Rs 755 crores during FY 2017-18 to FY 2019-20. During this time, the company’s net profit fell 24 percent to Rs 82 crore. The weak market position has adversely affected the company.
However, the situation has changed in lockdown. In the June quarter, the company has given a revenue of Rs 247 crore and a profit of Rs 48 crore. The company paid a dividend payment of 28 percent in the financial year 2019-20. The company had a net debt of Rs 658 crore as of June quarter.
Valuation The
company is seeking a valuation of 26 times based on FY19-20 earnings and 16 times based on June earnings. ICICI Securities and IIFL Securities are trading at 28 and 9 times respectively. The company is less attractive for long-term investment.
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