Angel Broking IPO Review
Due to bull run, there is flood of IPO’s that are hitting the stock market now in India. Happiest Minds IPO is listed few days back and investors enjoyed 130% returns on listing day. While Cams IPO and Chemcon IPO would open early next week, its turn for Angle Broking IPO now. Angel Broking IPO would open for subscription on September 22, 2020. Angel Broking is one of India’s oldest stockbroking houses providing broking, margin funding, advisory and financial services in India. Should you invest in Angel Broking IPO? In this article we would do Angle Broking IPO Review and would provide you various analysis of the IPO.
About Angel Broking Limited
Angle broking is the largest retail broking house in India. They are a technology led financial services company that provides broking and advisory services, margin funding, loans against shares and financial products distribution to its clients.
Its broking and allied services are offered through (i) Its online and digital platforms, and (ii) Its network of over 11,000 authorised Persons.
It had 4.39 Mn+ downloads of its Angel Broking mobile application and nearly 1 Mn downloads of Angel BEE mobile application as of June 30, 2020, which enable its clients to avail its services digitally.
Digital marketing has enabled to garner 398 million digital impressions in June, 2020 on its various online and digital platforms. Its customer outreach, spans across approximately 96.87% or 18,649 pin codes in India. They manage Rs 132,540 million in client assets and over 2.15 million operational broking accounts (as on 30-Jun-20).
Angel Broking IPO Details
Here are the IPO issue details.
|IPO Date||Sep 22, 2020 to Sep 24, 2020|
|Face Value||Rs 10 per equity share|
|IPO Price band||Rs 305 to Rs 306 per share|
|Issue Size||Total of Rs 600 Crores|
|Fresh issue||Rs 300 Crores|
|Offer for sale||Rs 300 Crores|
|IPO Lot Size||49 shares|
|Listing at||BSE and NSE|
Angel Broking IPO Lot Size for retail investors
Angel Broking IPO Prospectus
Angle Broking IPO Lead Managers
- Edelweiss Capital Limited
- ICICI Securities Limited
- SBI Capital Markets Limited
Objects of issue – Angel Broking IPO
Here are the objects of the IPO issue.
A) Offer for Sale (OFS): The object of the Offer for Sale is to allow the selling shareholders to sell equity shares held by them. The company will not receive any proceeds from OFS.
B) To meet working capital requirements and general corporate purpose.
Who are the company promoters?
Dinesh D. Thakkar, Ashok D. Thakkar and Sunita A. Magnani are the promoters Angel Broking company.
Here is the summary of the financial information of the company.
A) Consolidated Financials (Restated)
|Total Revenues (Rs in Crores)||Profits after tax
(Rs in Crores)
B) Standalone Financials (Restated)
|Total Revenues (Rs in Crores)||Profits after tax
(Rs in Crores)
C) Its average EPS in the last 3 years is Rs 11.4 and FY2020 is Rs 11.4.
What is the Angel Broking IPO Credit Rating?
The credit rating is not required for issue of equity shares, hence, they have not approached any credit rating agency for credit rating.
What are the key strengths of Angel Broking Limited?
Every investor should understand the company’s key strengths so that one can compare with its competitors to know how unique is such company in their business. Their investment decision would change based on these facts. Here are the key strengths of the company.
1) One of the largest retail broking houses with strong brand equity
2) Client acquisition through diversified digital platforms
3) Integrated, end to end, and advanced digital experience ensuring client satisfaction
4) Diversified product offering across segments at competitive price
5) Robust business metrics building operating leverage
6) Experienced management team with proven execution capabilities
What are the various strategies of Angel Broking Ltd?
Company strategies would help investors to know what company is intending to do in the future and whether these strategies would help in revenue or margin growth. Such information would help investors to decide whether to invest for short term, medium term or for the long term. Here are the company strategies.
1) Strengthen its leadership position to become the largest retail broking business in India
2) Augment its investment in mobile platform, artificial intelligence, machine learning capabilities and newer technologies
3) Establish a leadership position in the investment advisory space to support its business
4) Capitalisation of the growing investable wealth in India
Angel Broking IPO – Why should you invest in this IPO?
Here are a few reasons to invest.
1) Angel Broking is one of India’s oldest stockbroking houses providing broking, margin funding, advisory and financial services in India.
2) On the face of checking the financial performance, there is no growth in revenues in the last 3 years. This is majorly due to reduction in interest income in the last 3 years. Its fees and commission through brokerage has increased year on year in the last 3 years.
Major risk Factors to consider before investing in Angel Broking IPO
These risk factors can impact company revenue and margins which would affect its share price. Investors should go through these points and understand these risk factors before investing.
1) Its margins are on declining mode in the last 3 years
2) The outbreak of COVID-19, or outbreak of any other severe communicable disease could have a potential impact on its business, financial condition and results of operations.
3) General economic and market conditions in India and globally could have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.
4) Lalit T. Thakkar, one of the members of Promoter Group and one of the Selling Shareholders, has in the past been debarred from accessing capital markets.
5) Company, some of its Directors, its Promoters, its Subsidiaries and certain Group Companies are involved in legal and other proceedings.
6) They rely on its broking and related services business for a substantial share of its revenue and profitability. Any reduction in brokerage fee could have material adverse effect on its business, financial condition, cash flows, results of operations and prospects.
7) There are operational risks associated with the financial services industry which, if realised, may have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects
8) They face significant competition in businesses, which may limit its growth and prospects.
9) For complete internal and external risk factors, you can refer the RHP of the company.
How to apply for Angel Broking IPO?
You can follow these steps:
- Visit your demat account login
- Visit IPO section
- Check for Angel Broking IPO link and click to bid
- Select the IPO price and select bid Qty and submit
How to apply Angel Broking IPO through Zerodha?
Here is the step by step process.
- Login to Zerodha portal
- Go to Portfolio and click the IPOs link section
- Visit ‘Angel Broking IPO’ row and click the ‘Bid’ button
- Enter your UPI ID, Qtry and Price
- Click on ‘Submit’ IPO application form
- Visit the UPI App (net banking or BHIM option) to approve the mandate.
Angel Broking IPO Tentative Dates / Timetable of the IPO
|Finalization of Basis of Allotment||29-Sep-20|
|Unblocking of ABSA and Initiation of Refunds||30-Sep-20|
|Credit of shares to Demat Accounts||01-Oct-20|
|IPO Shares Listing Date||05-Oct-20|
Angel Broking IPO price – Is it reasonably priced?
1) On the upper price band of Rs 306 and EPS of Rs 11.44 for FY20, the P/E ratio works out to be 26.7x.
2) For last 3 years EPS of Rs 11.9, P/E ratio is 25.7x.
3) Means, the company is asking the issue price of Rs 306 in the P/E range of 26.7x to 25.7x.
4) Its peers like Motilal Oswal is trading at P/E of 54.7x (Highest) and IIFL Securities are trading at P/E of 5.4x (Lowest) and industry average P/E is 24.1x. Hence the company asking price of Rs 306 is fully priced and above industry average.
Angel Broking IPO Recommendation – Should you invest or not?
Angel Broking is one of the oldest stock brokers in India. Its revenues have fallen majorly due to fall in interest income, however, its revenues through brokerage business is increasing year on year. Drop in margins is also a major concern. Its issue price is fully priced and above industry average. In this artificial bull run, there is flood of IPOs now, which want to make money from the retail investors. High risk investors can invest in this IPO for medium to long term. It may or may not provide listing gains.
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