Anand Rathi IPO: 7 Key Points Before you apply for this IPO
The Anand Rathi & Stock Brokers IPO is open for subscription. My final view is to apply for this IPO, targeting small-to-reasonable listing gains and a potential long-term hold. Here are the seven key points you should know before making your final decision.
1. Strong Financials & Brand Value
Anand Rathi has demonstrated strong financial performance with consistent growth. The company’s revenue jumped 24% from ₹683.26 Cr in FY24 to ₹847 Cr in FY25, while its Profit After Tax (PAT) grew even faster, rising 34% from ₹77.29 Cr to ₹103.61 Cr. Backed by the immense reputation of the Anand Rathi Group, the company enjoys a strong brand premium and a loyal client base, which is a major asset in the competitive financial services industry.
2. Highest Average Revenue Per Client (ARPC)
A key standout for Anand Rathi is its highest ARPC in the industry. As of FY25, its ARPC was ₹29,347, which is a testament to its strong client relationships, business longevity, and ability to monetize its client base effectively. This is driven by a mature client profile, with over 84% of its active clients being over 30 years old, indicating a higher investable surplus.
3. Diversified Business Model
While broking remains the core business, Anand Rathi is actively diversifying its revenue streams. The company is looking to bring its non-broking verticals, such as Margin Trading Facilities (MTF) and financial product distribution, to account for up to 50% of its business. This diversification is a significant positive, as it will help de-risk the company from market volatility and improve the overall quality of earnings.
4. Attractive Valuation
Based on its FY25 numbers, the IPO is valued at a P/E of 25.06x on a post-issue basis. This is a reasonable valuation when compared to peers like Motilal Oswal (20.91x) and Angel One (24.53x). Moreover, my personal estimates for FY26 suggest a PAT of ₹155 Cr, which would bring the forward P/E down to just ~18x. Assigning a 3x PB multiple on my FY26E NAV of ₹214 gives a fair value of ₹642, implying a significant 55% upside potential over the long term.
5. IPO Details & Use of Proceeds
The ₹745 Cr IPO is entirely a fresh issue, with no Offer for Sale (OFS) component. This means all the proceeds will go directly to the company. A substantial portion (₹550 Cr) is earmarked for funding long-term working capital requirements, which will enable the company to expand its MTF book and grow its business aggressively. The remainder will be used for General Corporate Purposes.
| Particulars | Details |
|---|---|
| Issue Dates | September 23 - 25, 2025 |
| Price Band | ₹393 - ₹414 per share |
| Issue Size | ₹745 Cr (Entirely Fresh Issue) |
| Lot Size | 36 shares (~₹14,904) |
| Listing Date | September 30, 2025 |
6. Risks to Consider
While the business has strong fundamentals, it's important to be aware of the risks. The company operates in a highly competitive brokerage and financial services market, with intense competition from both full-service and discount brokers. Furthermore, its business is heavily dependent on overall market conditions; any market downturn could negatively impact its revenue and profitability. You should also be aware of the company's high related-party transactions and pending tax proceedings.
7. Final Conclusion: A Good Long-Term Bet
Anand Rathi & Stock Brokers is a fundamentally strong company with a robust business model and an experienced promoter group. The company is well-positioned to capitalize on the increasing financialization of savings in India, supported by a diversified business model and one of the highest ARPCs in the industry. The IPO proceeds will fuel aggressive growth, making it a compelling investment for the long term.
Frequently Asked Questions (FAQs)
1. What is the business of Anand Rathi & Stock Brokers Limited?
Anand Rathi is a full-service brokerage firm offering services like broking, margin trading, and financial product distribution to a diverse clientele across India.
2. What is the issue size and price band of the IPO?
The IPO is a fresh issue of ₹745 Cr, with a price band of ₹393 to ₹414 per share.
3. When will the shares be listed?
The shares are tentatively scheduled to be listed on BSE and NSE on September 30, 2025.
4. What is the subscription status?
As of September 24, 2025, the IPO has been subscribed around 75% overall, with the retail portion being subscribed almost fully at 99%.
5. What is the latest GMP?
As of September 24, 2025, the Grey Market Premium (GMP) is around ₹45, indicating an expected listing gain of approximately 11%.
6. How can I check my allotment status?
You can check the allotment status on the IPOwiz App, MUFG Intime India Private Limited, or on the BSE website after the allotment date on September 26, 2025.
My view remains: Applying for Small–Reasonable Listing Gains & Long-term Hold.
Just a personal view, for educational purposes only. Do your own due diligence before applying.