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Anand Rathi Essentials

Discover and get a complete analysis on Anand Rathi Wealth Management Limited Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get the latest updates on Anand Rathi Upcoming IPO.

ISIN

INE463V01026

Face Value

₹5.00

Total Share

4,16,16,227

Total Income

₹279.25 Cr

Profit After Tax

₹45.11 Cr

EPS

₹16.53

P/E

46.16

P/B

9.33

Market Capitalisation

₹3,175.32 Cr

Enterprise Value

₹3,169.06 Cr

Book Value

₹81.78

Intrinsic Value

₹693.50

Dividend Yield

0.66 %

Earnings Yield

2.17 %

Sector

Financials

Sub-sector

Investment Banking

Anand Rathi Growth

Compounded Sales Growth

-20.04%

1 Year
6.28%

3 Year
59.48%

4 Year

Pro Only

Compounded Profit Growth

-26.79%

1 Year
-0.71%

3 Year
309.77%

4 Year

Pro Only

Return On Equity

20.05%

2021
54.45%

2019
100.66%

2018

Pro Only

About Anand Rathi

Anand Rathi Wealth Services Limited, is a public company, operates as a non-bank wealth solution company in India. It distributes mutual funds; and sells structured products/market linked non -convertible debentures.
The company caters to clients across mass affluent, HNI as well as the Ultra HNIs through various solutions ranging from personal service to technology and Robo-advisory.
The company has over INR 26,000 crores of assets under management across 5,000 families in India and globally. Their team is also increasing at a high pace. Currently, the company has over 250 relationship managers operating from 12 locations, and 6109 clients.
The company is incorporated on 22 March 1995, having registered office in Haryana.

Anand Rathi IPO Details

Anand Rathi Wealth, the wealth management arm of Anand Rathi Financial Services, has filed a draft prospectus for an initial public offering. The Mumbai-based firm and other promoters will sell 1.2 crore shares in Anand Rathi Wealth through the issue to raise about ₹660 crore.

Open Date

2 Feb 2021 at 05:00 AM

Closed Date

6 Dec 2021 at 05:00 AM

Listing Date

14 Dec 2021 at 09:00 AM

Anand Rathi
Offer for Sale

₹ 660.00 Cr

Anand Rathi
Total IPO Size

₹ 660.00 Cr

Anand Rathi
Price Brand

₹ 530 - ₹ 550

Anand Rathi
Min Order Qty

27 Shares

Anand Rathi
Grey Market Premium

₹ 25 - ₹ 28

Anand Rathi Retail Subscription Status

7.76x

Anand Rathi QIB Subscription Status

2.50x

Anand Rathi Non-Institutional Subscription Status

25.42x

Anand Rathi Employee Quota Subscription Status

1.32x

Anand Rathi Merger & Acquisition

Acquisition

Anand Rathi shares and stock brokers limited, AR Venture Funds Management and Anand Rathi financial services entered into an agreement to acquire Religare Wealth Management on Feb 17, 2017 and completed the acquisition in early 2017.

Anand Rathi Subsidiaries

AR Digital Wealth Private Limited
Freedom Wealth Solutions Private Limited
Ffreedom Intermediary Infrastructure Private Limited

Anand Rathi Business Model

ARWL is one of the leading non-bank wealth solutions firms in India and have been ranked amongst the top three non-bank mutual fund distributors in India by gross commission earned in Fiscal 2020 (Source – CARE Advisory Research). They serve a wide spectrum of clients through a mix of wealth solutions, financial product distribution and technology solutions. They provide services primarily throug flagship Private Wealth (“PW”) vertical where the company manage ₹ 260.58 billion in AuM as on March 31, 2021.

Anand Rathi Revenue Segmentation

Mutual Fund Distribution Income
Income from distribution & sale of Financial products

Other Income
IT Enabled Services

Referral Fees

Anand Rathi Product & Services

Services-

Corporate finance
Investment banking
Stockbroking
Private wealth

Product-

Private Wealth Management
Digital Wealth Management
Omni Financial Advisors

Anand Rathi Assets

As of March'21 total assets of the company include Right-of-Use Asset, Leasehold Improvements, Computer equipment, Vehicles, Office equipment, Furniture & Fixtures and Software.

The company owns Right-of-Use Asset of Rs.12.25 Cr.

The company owns Computer equipment Rs.2.76 Cr.

The company owns intangible assets including software worth Rs.32.18 Cr.

The company owns Office equipment and Furniture & Fixtures of worth Rs.3.07 Cr.

Anand Rathi Industry Overview

Industry Statistics

Wealth management companies have focused on high-net-worth individuals (HNI) with net assets of more than $1 million and ultra-high-net-worth individuals (UHNWI) with net assets of more than $30 million. In recent years there is an increase in reliance of HNIs' on wealth managers for investment advice in India.
The HNI and UHNWI groups in India have witnessed significant growth in the last decade and this is a demand driver for wealth management services. It is estimated that by 2025 HNI population may grow by 75% and UNHWI can grow by around 63%.
Even there is increase in trend of HNIs investing in unlisted equity to be a part of startup story apart from the quest to have higher anticipated returns on account of unlocking of potential valuation upon listing.
The WEF estimates 80% of India’s population to fall in the middle-class segment by 2030, up from about 50% in 2019. The increase in disposable income is expected to create wealth management needs in the affluent middle-class segment.
From recent years there is steady growth in number of client’s interest towards Access to Mutual Fund / Other financial Product Distribution, Financial Planning Advice, Tax Planning Advice and Wealth management advice.

Tablet and mobile apps are increasing company's reach in B30 locations. Moreover, there have been several industry-wide initiatives to help distributors build digital capabilities in order to serve investors better.

According to a report published in 2019, India’s wealth management space is led by domestic players accounting for 77.5% share by assets under management (AUM).
In India there is a strong correlation between Wealth/GDP, where India’s GDP is expected to grow at much faster rate, it is estimated that it may mirror similar increase in its wealth/GDP ratio as growth observed by other developing nations.
It has been observed, there is an increase in preference of investing in financial assets and the trend is likely to continue to grow in the coming years.

Future Prospects

The Indian Wealth Management market is on a sustained path of growth, given India’s long-term economic prospects, positive demographics, rising income levels and current low penetration.
India has the key ingredients of a high-growth wealth management market, namely driven by a very large and young mass affluent segment. By the end of 2021, India is expected to have 34.33% share of youth in total population. Although India is one of the worlds fastest growing UHNI’s populations both in terms of the number of individuals and the wealth levels, percentage of wealthy Indians remains very small compared with developed economies.
With increase in start-ups, rising income levels and friendly macro factors with ease of doing business, may drive growth of young HNI population in India, a big opportunity for wealth management firm to tap into underpenetrated market. In 2017 major part of HNI population in India was seeking a wealth manager to advice on investment opportunity.
UHNHs in India are inclining towards ‘opportunity-driven approach’ to equity investing and are keen on reducing exposure to real estate and debt instruments in pursuit of bigger profits in equity market. They are expected to double to 3,30,400 with Rs.352 trillion worth of assets by 2022 at a CAGR of 18.13% mostly increase driven by young Indians getting wealthier.
In the next five years, financial assets may witness much faster growth rate as compared to physical assets. Physical assets are expected to be restricted to 37% of the total wealth vs 43% in FY20. Whereas, financial assets are expected to form almost 63% of the total individual assets by FY25 vs 57% in FY20. The reduction in bank deposit rates in the past year has further led to a shift in investment to mutual funds and the stock markets.
According to a report published 2021 by the BCG, financial wealth grew among Indians at 11% p.a. from 2015 to 2020 and is further expected to increase at 10% p.a. to US$ 5.5 trillion by 2025.

Government Initiatives

In order to promote investors participation, government / regulators are boosting investor’s confidences to participate in equity / debt market by increased focus on client centricity, fiduciary responsibility and compliance. Regulator have been more stringent in their requirements regarding advisor qualifications, infrastructure, risk profiling and suitability criteria.
To enhance the penetration of mutual funds in the country, SEBI sought to increase the sales in the B15 location through the commission structure.
In 2011, SEBI proposed a self-regulatory organization (SRO) for the Indian wealth management sector that would help regulate business and serve as a medium for SEBI to implement various wealth management initiatives.
In September 2012, SEBI allowed fund houses to charge an additional 30 basis points on daily net assets in the total expense ratio, should the new inflows from B15 cities be at least 30% of the gross new inflows in the scheme or 15% of the average AUM, whichever is higher.
With the increase in the wealth of global Indians; the Indian government’s push to control illegal channel of funds and push for tighter regulations of the capital markets.

Anand Rathi Awards & Achievements

Fastest growing wealth management organization 2020 by World BFSI Congress.
Customer Service Excellence Award by World BFSI Congress, 2020
Best Wealth Manager India 2019 by cfi.co.
Best Wealth Manager India by Capital Finance International.
London Ranked 34 in India’s Great mid-size Work Places 2017 by HT Media Limited.
Deputy CEO, Mr. Feroze Azeez has been featured in the Fortune India – Class of 2019 – 40 under 40 lists, for his unique contribution to the Industry.

Anand Rathi Strengths

The company has a strong brand name, they operate business under the aegis of ‘ANANDRATHI'. According to the company their business prospects and ability to attract clientele are, to a certain extent, dependent on the strength and reputation of the brand name.
Anand Rathi Wealth Ltd has higher ROCE Ratio. Company’s ROCE Ratio is 24.88% against peers ROCE i.e. between 12-22%.
The Anand Rathi group expects 15.0% CAGR returns from frontline indices next 10 years basis.
Company is working on digitalization which is helping it in making its processes paperless, efficient, easy and real-time. It is expected to enable platform convergence and may create opportunities for new client engagement.
According to company their robust and readily available technological solutions enabled customers and employees to continue to function and interact seamlessly despite the unprecedented complex environment created by the COVID-19 pandemic, which has given them a competitive advantage during this period.

Anand Rathi Shortcomings

Company’s operating margin FY20 stood at 25.06%, which is lowest among its peers, however the company is striving had to yield good returns from its investments and changed business model
Company saw a decline in the revenue from operations and profits, it was primarily due to the adverse effect of the COVID-19 pandemic, extended period of business disruptions, stock market volatility and decrease in investor’s sentiments for new investment in the initial phase of the COVID-19 pandemic.
According to recent amendment of SEBI the same client cannot be offered both advisory and distribution services within the group of the non-individual entity by a single company. This made the company to discontinue some of its operations.

Anand Rathi Opportunities

Increase in the wealth of global Indians and a rising share of the organized market players such as independent wealth advisors and small brokers/agents as financial advisors are fueling growth in the wealth management market.
Since the COVID-19 period has forced branch lockdowns leaving investors no option but to use online and digital services, the firms could see possible drive and upsurge in demand for digital channels and therefore the need to upscale and upgrade them.
Company have huge upside growth potential as there is low penetration of distributors in the country, with only a small number of distributors catering to the large population base.
In 2018, top 8% of the total population in India represents 45% of the total wealth and of the above only 20% take advice from wealth managers. increase in start-ups and rising income levels may drive growth of young HNI population in India; there is a big opportunity for a wealth management firm to tap into an underpenetrated market
The current wealth management market in India is at the early stages of development. Until now, the focus of established players was on the urban segment, still companies have the opportunity to grab the attention of HNIs residing in rural areas.

Anand Rathi Threats

The current pandemic situation results in stock market volatility because of macro headwinds such as rupee depreciation and crude prices, as well as the liquidity crisis that hit the financial sector after defaults is expected to bring challenges for the company as the investors are hesitant to invest in the market.
With rising use and adoption of different technologies, there has been growth in data breaches and cyber-attacks in the recent years. As these institutions hold a lot of private data, any leak can take a significant hit on their brand image.
The Indian wealth management industry is primarily regulated by the SEBI. Over the years, especially after the 2008 economic downturn, SEBI has introduced regulations to protect customers. These regulations have severely limited the abilities of wealth management companies, resulting in low revenue generation.
Wealth management firms need to adopt technological advancements and provide individualized, comprehensive advice aligned with the changing investment trends and needs. Constant innovation and new ways to deliver services may continue to disrupt the industry.