Angel Broking IPO: Brokerage Views

This post on Angel Broking IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Angel Broking IPO or not.

Angel Broking IPO: Grey Market Premium etc.

08-09-20 GMP Not much activity. GMP could be Rs. 20

Angel Broking IPO: Anchor Investors

Angel Broking garnered Rs 180 crore from 12 anchor investors ahead of its IPO. Thde Anchor investors include Goldman Sachs India, Macquarie Fund Solutions, Invesco Trustee, Max Life Insurance company, ICICI Prudential, HDFC Mutual Fund, and Sundaram MF. Six domestic fund houses put in 70% of total anchor allotment, and bought the stock for 20 of their schemes

Subscription: Angel Broking IPO ( x times)

Day / X times	QIB	NII	Retail	Total
Day 3
Day 2	0.00	0.31	2.79	1.46
Day 1	0.00	0.16	1.29	0.68
Tot Applications	~ 285676
Appl wise Retail	2.03 x

Consolidated Brokerage Views on Angel Broking IPO

Anand Rathi :”We believe Angel Broking Ltd. IPO & OFS is fairly priced at current price band considering its financial performance and growth prospects. We recommend Subscribe for the IPO.”

Capital Market : ” Score 40/100 ;The Indian securities industry is fragmented and typified by low barriers to entry. Accordingly, the company faces significant competition from companies seeking to attract clients’ financial assets. Stock broking has become almost a commoditized business with constant pressure on pricing from online brokers. While online start-ups offer more technologically advanced offering at very low cost, brokers backed by big institutions offer higher trust factor. Brokers like Angel can get sand-witched between the two.”

KR Choksey: “We believe the company will continue to update products and services as per industry requirements to be competitive in the industry while pursuing to deliver high ROEs for the company ( >14% since FY18). Additionally, it has paid dividends to its shareholders for last 3 years sustaining more than 20% of dividend payout ratio. Thus, IPO valuation of ~25x FY20 annualised EPS, we recommend SUBSCRIBE to the issue with long term positive view.”

Nirmal Bang: “Increase in market share by 2x in last five years, strong track record of introducing new technological products, proactive management and brand equity developed over last 2 decades; positions Angel well for transitioning into one of the top discount brokers in India with decent profitability in the longer term. Upon combining the financials of IIFL Securities and 5 Paisa, we observe that this entity shares identical characteristics to Angel with respect to number/market share of active clients, revenue and return on equity. However Angel’s valuations compared to the hypothetical entity of IIFL + 5 Paisa is higher based on FY20 earnings. Also we believe Q1FY21 has benefits of bunching up of (i) work from home due to COVID situation & (ii) broad based buoyancy in markets. The sustenance of these dual benefits into the future is uncertain and hence we believe it would be premature to annualize Q1FY21 earnings. We thus rate the issue as “NEUTRAL”.

Religare : “We believe Angel Broking is well placed to capitalized opportunities in the capital market with well experienced management team, research capabilities, decent presence across digital platform ahead of peers and large cliental base. Further, opportunities in Indian financial market and good traction from retail participation would benefit the company in coming period. On valuation front, Angel Broking is valued at a P/E of 13x FY21 annualized EPS. Going forward, we remain positive on the company’s growth and so investors having long term view can subscribe to the issue.”

SMC : “Angel has seen strong incremental client additions during Q1FY20, which is reflecting in its bottom line for the quarter. This could result in a stronger PAT in FY21 vs FY20. The trading volumes of the retail segment is likely to remain strong in the years to come as new investors are joining the equity culture in India and hence the outlook for brokers with Retail focus remains positive from the medium to long term perspective.”

SPA Securities: “Angel has been able to retain and improve on its position with the digital and distribution edge, even in the era of advent of new age discount brokerages. The issue price discounts FY20 earnings by 25.4x while the for FY21 the discount rate is ~18x on diluted equity capital, the issue price implies a p/b multiple of 2.63 on diluted equity capital. Since client addition and volume uptick has been one of the most robust for Indian equity market retail trades there is a possibility of the same cooling off for some quarters and the ability of the company to wade through these tiles will be tested. We recommend a subscribe to the issue as a good long term investment in sync with the opportunities presented by the under penetration of investments in equities as an asset class and the strong brand equity created by the company over the last 2 decades with proven prowess in adoption of technology and strong advisory base.”

SP Tulsiyan Website: “Industry tailwinds supported by reasonable valuation make short term view on Angel broking positive. Hence, if someone wants to strictly take a short term bet, can go ahead. However, brokerages have not rewarded investors consistently over the long term with acute volatility, implying that this is not a portfolio stock for sure.”

MORE WILL BE ADDED AS THEY BECOME AVAILABLE

Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above infoimration is collated from various online sources and is for educational purpose only. Please visit indidivual brokearge sites to read the actual reports. Please donot make ypur investkent decisions based on this info as it is not completre amd exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.