Anand Rathi Wealth filed draft initial public offer (IPO) papers with capital markets regulator SEBI (Securities and Exchange Board of India) on Tuesday, July 20. The wealth management arm of domestic brokerage and financial services firm Anand Rathi Financial Services is planning to enter the primary markets for an offer for sale (OFS) by promoters and other shareholders. Equirius Capital, BNP Paribas, IIFL Securities, and Ananda Rathi Advisors are the book-running lead managers to the issue. The IPO will not include a fresh issue of equity shares, according to the draft offer papers.
Promoters of the company and other shareholders will sell 1.2 crore shares of Anand Rathi Wealth through the public issue. Of this, 92.85 lakh shares will be sold by Anand Rathi Financial Services, up to 3.75 lakh equity shares each will be sold by Anand Rathi, Pradeep Gupta, Amit Rathi, Priti Gupta, Supriya Rathi, Feroze Azeez, and Rawal Family Trust, acting through Rakesh Rawal. Another investor Jugal Mantri will sell 90,000 equity shares through the IPO. According to the draft red herring prospectus (DRHP) filed by Anand Rathi Wealth, Anand Rathi himself holds a 12.85% stake in the company while Anand Rathi Financial Services has a 43.12% stake, pre-IPO. The IPO will only be an offer for sale (OFS) and hence Anand Rathi Wealth will not receive any proceeds from the issue.
At the end of the financial year 2018-19, Ananda Rathi Wealth had an Asset Under Management (AUM) of Rs 18,393 crore. At the end of the previous financial year, this increased to Rs 26,670 billion. The company has been making profits for the last three financial years. At the end of the financial year 2018-19, Anand Rathi had revenue of Rs 284 crore and a net profit of Rs 58.4 crore. The same increased to Rs 336 crore and Rs 61.6 crore in the financial year 2019-20. Hit by covid in the financial year 2020-21, the company saw revenue slip to Rs 215.6 crore and net profit dropped to Rs 45.1 crore. “Decline in our revenue from operations and profits 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,” the company said in the DRHP.
Anand Rathi Wealth could join IIFL Wealth Management as the only other wealth manager listed on the stock exchanges on Dalal Street. IIFL Securities has a total income of Rs 1,659 crore as compared to Rs 279 crore of Anand Rathi Wealth. The Return On Net Worth for IIFL Wealth stands at 13.06% while for Anand Rathi the same is at 18.69%, according to the DRHP.