Anand Rathi Wealth IPO — All you need to know

Anand Rathi Wealth IPO — All you need to know
Anand Rathi Wealth provides wealth solutions and is one of the top three mutual fund distributors in India in the non-bank category.
Offer Details
  • Start Date: 2 December 2021
  • End Date: 6 December 2021
  • Price band: ₹530
  • ₹550 per share
  • Minimum investment: ₹14,850
  • IPO size: ₹659 crore
Business highlights
  • Its private wealth (PW) arm caters to over 6,500 families in the high-networth (HNI) segment, which is supposedly under-served and less price sensitive.
  • It’s assets under management (AUM) have grown at over 20% in the last three years and currently stand at over ₹29,000 crore
  • Under its other two verticals
  • Digital Wealth (DW) and Omni Financial Advisors (OFA)
  • digitally serves large mass affluent investors and independent financial advisors, respectively.
  • It has presence in 11 major Indian cities and serves its clients through more than 230 relationship managers.
Financial Information
It’s financial performance in fiscal ‘21 dipped due to the pandemic-related disruption. However, the profit bounced back in fiscal ‘22. In the first five months of FY22, the net profit stood at ₹51 crore supported by lower expenses.
Strengths
  • A well-known brand in the wealth management and financial services space
  • Presence across the customer value chain
  • Ultra-HNI, HNI and mass affluent
  • Has a sticky customer-base with about 55% of its clients being associated with it for over three years
  • Deploys in-house research and analytical tools for allocating assets and selecting securities based on client’s profile
Risks
  • The fall in mutual fund total expense ratio and the increasing popularity of direct plans could impact its mutual fund distribution business
  • The volatility or fall in the markets could impact demand for its services
  • The wealth management industry is highly competitive
  • Wealth management and mutual fund industries are tightly regulated. This means the company faces the risks of non-compliance
Opportunities
  • India’s AUM-to-GDP ratio in 2020 stood at 16% vs the global average of 63%
  • India’s low mutual fund penetration leaves room for growth
  • India’s pool of millionaires is expected to grow at a rate of 13% till fiscal 2025
  • Rising preference for financial assets versus physical assets augurs well for financial services providers