Anand Rathi Wealth Ltd IPO Details Issue Price, Date, News, Allotment Status, GMP, Link, Updates

IPO-Note	Anand Rathi Wealth Ltd
Rs-530-Rs-550 per Equity share	Recommendation: Avoid

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Anand Rathi Wealth Ltd IPO Company Profile: –

Anand Rathi Wealth Limited (ARWL) is a leading non-bank mutual fund distributor in India coupled with presence in Debentures Market. Company manages Asset under management (AUM) of Rs 294.72 billion under their Private Wealth vertical (PW). They are registered with Association of Mutual of India and acts as Mutual Fund Distributor. Their primary source of income is from distribution commission from asset management companies and sale of financial products. Currently company have presence in 11 cities across India and have a representative office in Dubai.

Anand Rathi Wealth Ltd IPO Details –

Issue Details
Objects of the issue	·To get the benefit of listed company and enhance company’s brand value.
Issue Size	Total issue Size -Rs. 660 Cr. Offer for Sale – Rs. 660 Cr.
Face value	Rs.5.00 Per Equity Share
Issue Price	Rs. 530 – Rs. 550
Bid Lot	27 shares
Listing at	BSE, NSE
Issue Opens:	2nd  Dec, 2021 – 6th  Dec, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

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Anand Rathi Wealth Ltd IPO  Financial Performance:

Anand Rathi Wealth Ltd IPO Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	74.73%	48.82%
Public	25.26%	51.18%

Source: RHP, EWL Research

Strengths:

• Company focus on the underserved and less price sensitive HNI segment.

• Ranked 3^rd largest non-bank mutual fund distributors in India by gross commission earned in Fiscal 2019, 2020 and 2021.

• As on 31^st Aug, 2021, 54.69% of Clients have been associated with company for over 3 years, representing 73.55% of total Private Wealth AUM.

• Focus on value added services such as estate planning, succession planning and creating wills for the clients.

Key Highlights:

• Company has three business verticals- 1) Private Wealth Vertical- to cater HNI and UHNI segment. 2) Digital Wealth Vertical- a “phygital channel” to address large mass affluent segment. 3) Omni Financial Advisors Vertical- a technology platform for Independent Financial Advisors to service their clients.

• PW AUM has grown at a CAGR of 22.47% from ₹ 180.37 billion as of 31st March, 2019 to ₹ 294.72 billion on August 31, 2021.

• As of August 31, 2021, the AUM for Digital Wealth vertical was ₹ 7.38 billion with 3,491 clients and 195 client engagement partners.

• Revenue has declined by 17% to Rs 279.24 crore in FY 21 from Rs 336.41 crore in FY 20.

• PAT has declined by 25.60% to Rs 45.84 crore in FY 21 from Rs 61.61 crore in FY 20. PAT margin is gradually declining from 21.1% to 17.00% in last three year.

• In FY21 company has reported negative cash flow of ₹ 21.01 crore.

Risk Factors:

• Revenue is almost flat over FY19 to FY21 and profit after tax has declined between FY 19 to FY 21 due to higher operating cost.

• Company faces competition from asset management companies, wealth advisory and distribution companies, domestic and multinational banks that target clients in the segment in which company operate.

• Since this is an Offer for Sale (OFS) so the fund raised is not going to be used for the growth of the company.

Outlook:

ARWL is among one of leading Mutual Fund Distributor in India by its AUM, the Company has shown strong additions in its AUM from last three years, however company has seen decline in its revenue and profit after tax during FY 21 due to higher operating cost. India has the lowest mutual fund penetration globally. The total AUM to GDP ratio of India stands at a mere 16%, way below the global average of 63. %. Countries like USA have AUM to GDP ratios of over 100%.  So, the mutual fund industry in the country provides huge scope for growth and development. At higher band price, Company is available at a P/E of 50x on FY21 earning while peer companies are trading at P/E of 28x. We recommend avoid to the IPO.

Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014

Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.elitewealth.in. Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)
Disclosure Appendix
Analyst Certification (For Reports)
Israil Khan, Elite Wealth Limited, suhail@elitewealth.in
The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.
As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:
(1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and
(2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.
For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.
Research Excerpts
This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit www.elitewealth.in.
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Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting https://www.elitewealth.in, or emailing research@elitewealth.in. with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail research@elitewealth.in.
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Ownership and material conflicts of interest Disclosure
Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.
Country Specific Disclosures
India – For private circulation only, not for sale.
Legal Entities Disclosures
Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone:011-43035555, Facsimile: 011-22795783 and Website: www.elitewealth.in
EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:
1. Reports
a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;
(b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;
(c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;
2. Compensation
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;
(c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
(d) EWL or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
(e) EWL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report.
3 In respect of Public Appearances
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL

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