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