INTERVIEW: Angel Broking CEO believes the ₹600 crore IPO will ride the ‘digital’ euphoria

Angel Broking
  • The share sale will remain open for investors until September 24 at a price band of ₹305-306 per share
  • In an exclusive chat with Business Insider Angel broking CEO Vinay Agrawal shared how the company has transformed its business digitally and saw almost 400% growth in the past few years.
  • Check out the latest news and updates on Business Insider.
After two successful IPOs last week, the market is back on seeing the line of companies looking to raise funds via shares sale. The next in the line is India’s fourth-largest stockbroking firm Angel broking with its ₹600 crore IPO opening tomorrow.

IPOSpecifics
Opening dateSeptember 22
Closing dateSeptember 24
IPO target₹600 crore
Price Band₹305-306 per share
Minimum bid 49 equity shares

The IPO from Angel Broking has come at a time when the rest of the broking industry has been under pressure.

CompanyStock change in the past three years
Edelweiss Financial Services-78%
Motilal Oswal Financial Services-18%
Emkay Global-55%

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And, this disappointing trend is well reflected in the company’s grey market premium. The premium for its unlisted shares has declined to 16% from 25% before the price band announcement, whereas other companies like CAMS and Chemcon are seeing a massive demand for their unlisted shares.

However, Vinay Agrawal, the CEO of Angel Broking, had a different story to tell. The growth since the pandemic has been exponential. “If you look at the daily retail turnover of the industry, you will find that it has been growing at a very very healthy rate. It is growing at a rate of almost 30%. I will tell you in the fiscal year 2018 the total retail daily turnover was ₹3.4 lakh crore and if you look at today in the first quarter, it is ₹7.10 lakh crore. 100% growth, that’s a very very healthy trend in the industry, and if you look at digital broking firms, like us, we have grown by 400%,” Agarwal told Business Insider in an interview.


And, most of the new users are small investors living outside India’s big cities. “Young customers are coming from tier-3 cities, and they are digital native customers,” he said.
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A digital rebirth

Angel Broking has been around since 1996 but its all-digital avatar took its final shape only last year. “We have been trying to be digital, but the Indian ecosystem was not really ready. After Jio was launched everyone moved to 4G and other telecom operators kind of joined the bandwidth. We saw a very very interesting change. We started to see a lot of people from tier 2, and tier 3 cities started participating. This was very encouraging. You know earlier broking houses will typically get customers from their own branches and you can’t set up branches in tier 2 and tier 3 cities as there weren’t a lot of customers in those cities.”

It’s not just Angel Broking, even peers like Zerodha and Paytm have a similar narrative. In fact, Zerodha’s trading platform Kite has over 3 million users, where the average age is 25-35. The bootstrapped unicorn also claims to have 15% of the retail trading volume. “Post COVID and the lockdown, there have been a lot of new and first time investors entering into the markets, which has seen most of the online brokerages add more than twice the number of monthly accounts being opened before the lockdown,” Zerodha founder Nithin Kamath told Business Insider in an earlier interview.
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A new but promising entry in the market is Paytm Money’s stock broking feature, solely because of its opportunity to tap into the user base of its parent app – Paytm. “If they bring 10 million of those users into the stock market, it would be massive," Vivek Bajaj, co-founder of Stockedge told The Economic Times recently.

CompanyUsers
Angel Broking2.15 million
Zerodha3 million
Paytm Money (Mutual funds. Stock broking launched recently)6.6 million
Groww80 lakh
Source: Company data

Watch the entire interview with CEO of Angel Broking here:

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