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Angel Broking IPO Makes Weak Start; Trades at 10 Percent Lower Than Issue Price

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Representative Image

The listing was in accordance with the expectations of the market experts. Some analysts had voiced concern over the valuations, muted revenue and negative cash flows in the first quarter of the financial year

One of the largest retail broking service providers, Angel Broking registered a weak start after its share prices were listed at a discount of as much as 10 per cent in the IPO on Monday. As opposed to the issue price of Rs 306 apiece, the shares were listed at Rs 275 on the BSE as well as the National Stock Exchange.

The company was trading at Rs 282 on the BSE at 11:55 am, when reports last came in. The listing was in accordance with the expectations of the market experts. Some analysts had voiced concern over the valuations, muted revenue and negative cash flows in the first quarter of the financial year. Nevertheless, the company did add a significant number of clients.

“Although the company is one of the largest retail broking houses in India in terms of active clients, it disappoints on the valuation front. Fundamentally, too, it is not attractive. The revenue has remained muted over years despite a robust client base growth at a CAGR of 36.81 percent during FY18 to FY21. The company has generated negative cash flow from operations during Q1FY21 and the ratios also do not look appealing,” Manali Bhatia, Head-Research at Rudra Shares & Stock Brokers, was quoted by moneycontrol.com as saying.

Gaurav Garg, Head of Research at CapitalVia Global Research also said that he does not expect “much action on listing day as it might not be able to impress investors after many IPOs (initial public offerings) have given good returns in this season.”

The initial public offer of the retail broking giant was subscribed nearly 3.94 times as it managed to raise Rs 600 crores between September 22 and 24. It had received 5,42,64,854 shares, much more than the 1,37,70,491 shares on offer.

Nearly half of the proceeds of the offering would be utilised to meet the capital requirements and for general corporate purposes. The stockbroker firm is one of the leading financial service entities which provides through online and digital platforms.


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