We’re sure you’re spoilt for choice about which IPO to apply for. Will it be CAMS or Chemcon Specialty Chemicals? Before you decide, you should know that Angel Broking is opening its initial public offering too. Here’s a lowdown on the week’s third IPO.
Angel Broking is one of the largest independent full-service retail broking houses in India. It provides broking and advisory services, and margin funding. As of June 2018, it claims to have over 110 branches across India, and managed a little over ₹11,300 crore in client assets, and maintained over 11 lakh active broking accounts.
Issue opens: 22 September 2020
Issue closes: 24 September 2020
Issue price band: ₹305–₹306
Lot size: 49
Click here to apply for this IPO
Read on to know more about Angel Broking.
Established in 1987, Angel Broking is a financial services company that offers facilities such as stockbroking, commodity trading, depository services, investment advisory, and investor education. The company claims that as of FY18, at peak usage, it processes approximately 9.5 lakh trades in a day. It had an 8.31% market share in the commodity segment in FY18, while its share in the retail exchange turnover of the equity cash segment stood at 8.84%.
The company’s revenues stood at ₹7,64.28 crore (FY18), ₹7,57.97 crore (FY19), ₹7,24.62 crore (FY20), and ₹2,384.24 (Q1 2021). Meanwhile, profits for the respective periods were ₹107.08 crore, ₹79.83 crore, ₹82.34 crore, and ₹47.3 crore.
Angel Broking’s initial public offer comprises a fresh Issue and an offer for sale by the selling shareholders. The company will not receive any proceeds from the Offer for sale, wherein existing stakeholders will exit the company by diluting their shares. Meanwhile, the fresh issue will be used to meet working capital requirements, and for general corporate purposes.
It’s worth pointing out some of the caveats that you must consider before investing in the company. For one, the company relies on broking and related services business for a substantial share of their revenue and profitability. Any reduction in brokerage fee, perhaps due to regulatory changes, could have an adverse effect on our business, financial condition, cash flows, results of operations and prospects.
Second, most of Angel Broking’s revenue from its brokerage business comes from relatively few clients. For instance, of the 11.1 lakh customers with operational accounts in June 30, 2018, 4.5 lakh clients had traded on the exchanges in the preceding 12 months. The top 20% of its active clients, accounting for about 90,000 users accounted for over 85.00% of the company’s income from brokerage commission. The loss of such customers could significantly affect its business.
Third, the company admits that it may not be able to sustain growth and expansion of its client and sub-broker base in the face of competition. This is particularly significant given the rise of online brokers that are rapidly expanding their user base.
How to apply
Select the IPO you want to apply for from the list of open issues. Enter your correct UPI ID and select the investor type. The quantity should be a multiple of the lot size. If you wish to apply at the cut-off price, simply click on the checkbox next to ‘Cut-off price’.
You will receive an SMS from the NPCI confirming your bid and requesting you to accept the mandate on your UPI app. We have noticed a significant delay in UPI payment SMS/notifications from NPCI. Request you to be patient. Please ignore this message if you’ve accepted the mandate.
Click here to apply for this IPO
How to check your IPO allocation
The allotment status for the IPO will be available around 29 September 2020. The allotted shares will be credited in the demat account tentatively by 1 October 2020. The status check link is not activated by the registrar yet. We will send you the link as soon as the registrar makes it live. This may happen after the IPO closes on 24 September 2020.
Happy investing!