IPO Note - Anand Rathi Wealth Ltd By Religare Broking Ltd
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Anand Rathi Wealth Ltd.
About the Company
Anand Rathi Wealth Ltd. (Anand Rathi) is one of the leading non-bank wealth solutions firms in India and has been ranked amongst one of the three largest non-bank mutual fund distributors in India by gross commission earned. It serves a wide spectrum of clients through a mix of wealth solutions, financial product distribution and technology solutions. It provides services primarily through its flagship Private Wealth vertical where it manages AUM of Rs. 294.72 billion as of August 31, 2021. The company acts as a mutual fund distributor, registered with the Association of Mutual Funds in India. It distributes mutual fund schemes managed by asset management companies and earns distribution commissions on a trail basis from them. It also purchases non-convertible market-linked debentures and offers them to its clients and earns income from these sales. Its private wealth vertical caters to 6,564 active client families, serviced by a team of 233 relationship managers (RM) (including 8 RMs working on a contractual basis). It is currently present across 11 cities in India namely Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Kolkata, Chennai, Pune, Chandigarh, Jodhpur and Noida and has a representative office in Dubai.
Objects of the Issue
* To achieve the benefits of listing of the equity shares
* The listing of equity shares will enhance company’s brand name and provide liquidity to the existing shareholders.
Valuation
The Indian wealth management market is on a sustained path of growth, given India’s long-term economic prospects, positive demographics, rising income levels and current low penetration. While the percentage of wealthy individuals in India is very small compared with developed markets, high potential of growth in wealth is estimated in the future. The key growth drivers include upsurge in affluent clients with rising income levels, increase in wealth allocated towards financial products, and a shift towards mutual funds.
Anand Rathi stands to benefit given its strong focus on the underserved and less price-sensitive HNI segment. It follows a process-driven approach in providing wealth solutions and aims to achieve consistent client outcomes through a standardized investment strategy which augments the RM’s ability to deliver its service proposition. It believes in a holistic approach and as part of managing wealth for its clients, its proposition also includes estate planning, succession planning and creating wills as part of its core objectives, without any cost to its clients. The financial performance was impacted in FY21 wherein the company registered a decline in both revenue and profitability. Going forward, it intends to increase its RM count with a focus on higher vintage RMs. It also plans to focus on scaling its business by capitalizing on current market opportunities and geographic expansion. It also aims to increase its brand-building efforts with an increased digital focus.
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