Angel Broking's IPO or initial public offer worth Rs 600 crore will open for subscription today, making it the firm broking company to go public in past 10 years. The Mumbai-based brokerage, Angel Broking, has set a price band of Rs 305-306 per share for its IPO. The public offer, to be open for subscription between 10 am and 5 pm till rom September 22 to 24, comprises fresh shares worth Rs 300 crore and sale of shares (offer for sale) worth an equal amount by promoters.
Here are five things to know about the Angel Broking IPO:
1. The IPO will be open till September 24. The shares will be listed on stock exchanges BSE and NSE on October 5.
2. The company plans to utilize the funds raised through the IPO towards general corporate purposes.
3. Investors can purchase between one to 13 lots of shares under the Angel Broking IPO, which means 49-637 shares.
4. Up to 50 per cent of the public offer is reserved for qualified institutional buyers, at least 15 per cent for non-institutional investors and at least 35 per cent for retail investors.
5. Angel Broking, one of the largest retail broking houses in the country in terms of active clients, is a provider of broking services across equity, commodity and currency segments. Angel also facilitates the opening of demat accounts for its clients. In financial year 2019-20, Angel Broking derived 67 per cent of its revenues from its broking business, and 23 per cent from its margin funding operations.
What Analysts say
Brokerage Motilal Oswal has a "subscribe" rating on Angel Broking's IPO.
"At the higher end of the price band, the issue is valued at 29x FY20 P/E (fully diluted), which is seems fairly priced," Motilal Oswal said in a note. The brokerage is positive on Angel given its leading position in retail broking, robust technology platform and innovative offerings.
Top players are likely to gain market share considering the sharp rise in retail participation and ongoing industry challenges, Motilal Oswal said.
Nirali Shah, senior research analyst, Samco Securities:
"Angel Broking has the ability to use technology to cut down on costs which gives it an edge against traditional brokers. It has witnessed consistent growth in customer base helping it command a market share of 6.3 per cent, making it the 4th largest broker in terms of active clients. The pandemic has been a boon for the broking business as the number of retail investors have increased substantially."
"But from a valuation perspective, Angel Broking is valued at a price-to-earnings multiple of 26.6 times, which is slightly higher than expected. The company is well-placed compared to its peers and hence we recommend market participants to subscribe to this IPO too for listing gains only."