Anand Rathi Share
IPO Size: Rs. 745 cr, Entirely Fresh Issue
- For Rs. 550 cr working capital
Price band: Rs. 393-414 per share
M cap: Rs. 2,596 cr, implying 29% dilution
IPO Date: Tue 23rd Sep to Thu 25th Sep 2025, Listing Tue 30th Sep 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Traditional Stock Broker
Anand Rathi Share and Stock Brokers, 98% promoter owned, provides broking services, margin trading facility (MTF) and financial products distribution to 2.2 lakk active clients. Company can be termed as a traditional ‘old-age’ broker, at a time when the likes of Zerodha, Groww, Angel are referred to a ‘new-age’, as only 37% of active clients trade on its digital platform (web and app), while balance still relying on dealers.
Only Treasury Profits flow to the Bottomline
On FY25 revenue of Rs. 845 cr, broking segment accounted for 60% of topline Company has cash and equivalents of over Rs. 2,200 cr, and FY25 treasury income was at Rs. 143 cr, with PBT of Rs. 140 cr. Thus, main source of income is investments, with core operations of broking and lending (margin trading) not contributing to profits.
Poor Industry Prospects
Anand Rathi earns 41% of brokerage income or 21% of total revenue from F&O, a segment facing regulatory headwinds, which are likely to continue. Leader Zerodha says broking industry profits may have peaked out in FY25, in the medium term, while largest listed broker Angel One reported a 61% YoY drop in Q1FY26 PAT.
Anand Rathi’s MTF book also declined 11% in H2FY25, to Rs.686 cr. No wonder IPO is timed in Sep-end, so that Jun quarter numbers are not mandatory to disclose.
Grossly Overvalued
On FY25 PAT of Rs. 104 cr and EPS of Rs. 22.5, m cap of Rs. 2,600 cr, leads to a historic PE multiple of 18x.
Geojit Financial, with Rs, 750 cr revenue and Rs. 172 cr PAT in FY25, is trading at 14x PE, making Anand Rathi’s 18x PE super expensive. On a much lower PAT of just Rs. 104 cr, Anand Rath’s asking m cap of about Rs. 2,600 cr, is 24% higher than Geojit’s Rs. 2,100 cr m cap.
Even Angel One is ruling at FY25 PE of just 17x. No question of assigning a higher PE to Anand Rathi for 1/10th the size and a marginal presence in Indian broking industry.
Promoter Pledge
Besides 30% of 98% promoter holding being pledged, credibility is threatened due to promoter and MD's case of 'fit and proper' in relation to involved in National Spot Exchange Ltd (NSEL) being sub-judice.
23rd Sep 2025 at 09:12 pm