Angel Broking ₹600 crore IPO opens today: Here’s what works for it and what doesn’t

Angel Broking
  • This will be the eighth IPO to hit the market this year— and fifth this month.
  • Angel Broking has raised ₹180 crore from 12 anchor investors, including Goldman Sachs India, Macquarie Fund Solutions, Invesco Trustee among others to name a few.
  • The grey market premium currently suggests an upside of ₹40-45 over the issue price band.
  • Here’s what other brokerages have to say on Angel Broking’s IPO.
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India’s fourth-largest stockbroking firm Angel Broking’s ₹600 crore IPO will open for subscription from today (September 22). It will be the eighth IPO to hit the market this year— and fifth this month.

Ahead of the IPO, Angel broking has raised ₹180 crore from 12 anchor investors, including Goldman Sachs India, Macquarie Fund Solutions, Invesco Trustee, Max Life Insurance company, ICICI Prudential, HDFC Mutual Fund, and Sundaram MF.

Angel Broking has set an issue price band of ₹305-306 per equity share, and it is already gaining attraction in the grey market. The grey market premium currently suggests an upside of ₹40-45 over the issue price band.

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The grey market premium of all the upcoming IPOs took a massive hit yesterday after a blood bath in the market led to an 800 points crash in Sensex.

Brokerages on Angel Broking

Brokerage View on Angel Broking IPO
HDFC SecuritiesNot Rated
ICICI Direct ResearchNot Rated
Anand Rathi Research teamSubscribe
KR ChokseySubscribe

KR Choksey IPO research report maintained a ‘subscribe’ recommendation and said, “Angel Broking manages ₹132.5 billion of AUM for an overall client base of 2.15 million as of June 2020. It was placed at 4th rank in market share amongst leading players in the industry with the consistent growth in a number of NSE active clients which were at 0.77 million as on June 20. According to CRISIL Research, equity broking revenue has witnessed 10.5% growth during FY15-20. We expect more participation in the equity markets given the excess liquidity in the market and lower interest rates on bank’s term deposits”
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Risk factors to consider before hitting ‘subscribe’ for Angel Broking IPO

The ICICI Direct and HDFC Securities report highlighted some key risk factors to consider before one should decide to click on ‘subscribe’.

As of June, 30 Angel Broking garnered 72.2% of the total income from broking business and according to HDFC Securities, “any reduction in its brokerage fee could have a material adverse effect on the business.”

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It also said that “general economic and market conditions in India and globally could have a material adverse effect on the business, financial condition, cash flows, results of operations and prospects.”

The ICICI Direct report said the company might face concentration risks. “As of June 30, Angel Broking had 21.5 lakh operational broking accounts of which 8.1 lakh clients had traded on the exchanges in the preceding 12 months. Top 20% of its active clients (1.6 lakh clients) accounted for over 91.3% of the company’s brokerage income.” Which, according to the research firm, poses a threat to “company’s business, results of operation, financial condition and cash flows.”

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