Anand Rathi Share & Stock Brokers
- Anand Rathi Share & Stock Brokers is coming out with a 100% book building; initial public offering (IPO) of 1,89,74,029 shares of Rs 5 each in a price band Rs 393-414 per equity share.
- Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
- The issue will open for subscription on September 23, 2025 and will close on September 25, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 5 and is priced 78.60 times of its face value on the lower side and 82.80 times on the higher side.
- Book running lead managers to the issue are Nuvama Wealth Management, DAM Capital Advisors and Anand Rathi Advisors.
- Compliance Officer for the issue is Chetan Pravinbhai Prajapati.
Profile of the company
Anand Rathi Share & Stock Brokers is an established full-service brokerage house in India with over 30 years of experience. It provides broking services, margin trading facility and distribution of financial products under the brand ‘Anand Rathi’ to a diverse set of clients across retail, high net worth individuals, ultra-high net worth individuals and institutions. Its investment offerings span across a wide array of asset classes like equity, derivatives, commodities, and currency markets. While its client base is spread across various age demographics, 186,859 of its Active Clients, representing 84.36% of its Active Clients, were above 30 years of age as on March 31, 2025. Its 3 decades of track record, comprehensive product offerings, and focus on serving this key demographic, positions it for continued growth. It is a part of the Anand Rathi group which carries out a diverse range of financial services business through its group companies.
As of March 31, 2025, it offers its broking and other financial services through its (i) network of 90 branches spread across 54 cities in India; (ii) network of 1,125 Authorised Persons (i.e., agents appointed by it after approval from the relevant stock exchange) spread across 290 cities in India; and (iii) online and digital platforms. Its multi-channel presence through its Pan India branches and network of Authorised Persons and its online and digital platforms enables it to service its clients across Tier 1, Tier 2, Tier 3 and other cities.
It categories its offerings and services as Broking Services, Margin Trading Facility and Distribution of investment products. The company has over the years, enhanced client engagement and experience through digitisation of its processes and augmentation of its technological platforms. It provides its clients digital and online platforms through its proprietary website and mobile applications i.e., ‘Trade Mobi’, ‘AR Invest’, ‘MF Client’, and ‘Trade Xpress’ which enables a seamless trading and investment experience for its clients.
Proceed is being used for:
- Funding long-term working capital requirements of the company
- General corporate purposes
Industry Overview
India's capital markets, including stock, bond, derivative markets, and mutual funds, have significantly influenced the nation’s financial system and economic development. Notably, the Bombay Stock Exchange (BSE) Limited is ranked as 6th largest stock exchange and National Stock Exchange of India Limited (NSE) ranked as 7th largest stock exchange in the world by market capitalisation as of Jun’25. Reforms introduced by the Securities and Exchange Board of India (SEBI) have enhanced transparency, protected investor interests, and boosted market efficiency. The primary market has experienced significant growth especially in the contributions from Initial Public Offerings (IPOs) segment, driven by investor trust, efficiency, and transparency of capital markets. Additional, commodity and currency market have also witnessed remarkable traction.
The broking industry plays a crucial role in the Indian financial markets by acting as an intermediary between buyers and sellers of securities such as stocks, bonds, commodities, and other investment assets. Brokers facilitate the trading of these financial products, ensuring liquidity, efficient price discovery, and proper capital allocation across the markets. India's brokerage industry is highly competitive featuring numerous large and small players. Therefore, the brokerage landscape is fragmented, comprising a considerable number of entities registered with SEBI. Over time, the industry has evolved significantly, largely due to technological advancements, with online trading platforms revolutionizing the way trades are executed.
The brokerage market is divided between discount and full-service brokers, each catering to varied client needs. Discount brokers, offer modern trading platforms with low fees, attract a significant share of young and firsttime investors, resulting in a higher client base as compared to full-service brokers. Over time, brokers have expanded their offering to include investment advisory, AIF/PMS, and distribution of financial products like mutual funds. Further, the broking industry in India is estimated to be valued at Rs 520 billion as of FY25 and expected to grow at a CAGR of 16-18% over the next 2-3 years. The increase in financial literacy and reduced cost of investing due to emergence of discount brokers has contributed significantly to this growth. Moreover, these factors are expected to continue leading to healthy growth in the long term.
Pros and strengths
The highest ARPC amongst its peer set: The company had the highest ARPC amongst peer set during Fiscal 2025. The company’s Average revenue per broking client (ARPC) during Fiscals 2025, 2024 and 2023 was R 29,347, Rs 30,922 and Rs 26,012 respectively. The key contributors to its high ARPC are a combination of (i) its client vintage; (ii) average age profile of its clients; and (iii) its personalised client management approach combined with a wide array of investment solutions offered to its clients. 1,30,502 of its Active Clients, representing 58.91% of its Active Clients, as of March 31, 2025 had a vintage of more than 3 years and 99,422 of its Active Clients, representing 44.88% of its Active Clients as of March 31, 2025 had a vintage of more than 5 years.
Strategic use of MTF Business to drive higher ARPC: The company’s margin trading facility (MTF) Business is an integral component of its comprehensive investment solutions, aimed at helping clients achieve their financial objectives. By offering this facility, it provides its clients with the flexibility to leverage their investments, potentially enhancing returns while managing risks. Its Margin Trading Facility Book was Rs 3,766.38 million, Rs 6,172.93 million and Rs 6,855.13 million, as at March 31, 2023, March 31, 2024, and March 31, 2025 respectively, and has grown at a CAGR of a 34.91% from March 31, 2023 to March 31, 2025. Clients utilizing margin trading facility have generated substantially higher average revenue per client than clients who are not using MTF.
Full-service brokerage house with diversified revenue streams: The company’s revenue from operations primarily comprises of broking and related services (Broking Segment) and non-broking services (i.e. margin trading facility and distribution of investment products) (Non-Broking Segment). The company has been focused on diversifying its offerings by increasing income from distribution of financial products such as mutual funds as part of the Non-Broking Segment. As the Indian mutual fund industry expands, driven by rising assets under management and a broader investor base, the demand for professional advice and distribution services is expected to increase.
Pan India presence combined with robust digital capabilities for client acquisition and servicing: As of March 31, 2025 it offers its broking and other financial services through its (i) network of 90 branches spread across 54 cities in India; (ii) network of 1,125 Authorised Persons spread across 290 cities in India; and (iii) online and digital platforms, to retail, high net worth individuals, ultra-high net worth individuals and institutional clients. Its online and digital platforms enable it to acquire clients and serve its clients in geographies where it does not have a presence of own branches and Authorised Persons.
Risks and concerns
Maximum revenue comes from Broking Segment: The company’s broking and related services (Broking Segment) has consistently been its largest business vertical and contributes a substantial share to its revenue from operations. The company has garnered 60.34%, 67.15% and 67.82% of its total revenue from Broking and related services in FY25, FY24 and FY23 respectively. Any reduction in its revenue from Broking Segment could have a material adverse effect on its business, results of operations, cash flows and financial condition.
High working capital requirements: The company business operations are subject to high working capital requirements. The company’s working capital requirements are primarily utilised towards (a) margin trading facility (MTF) (b) its trade receivables and (c) other balances with banks. Currently, the company meets its working capital requirements through a mix of internal accruals and working capital facilities from scheduled commercial banks, loans from ARFSL, its Corporate Promoter, other related parties, and loans from others. The company’s inability to meet its present working capital requirements or its enhanced working capital requirements will have an adverse impact on its results of operation, business and financial condition.
Intense competition: The Indian financial services industry is intensely competitive, and the Broking Segment is particularly competitive with a sizeable number of large and small operators. As of December 12, 2024, there are almost 4,895 SEBI registered brokers under the equity segment. While a number of these entities may be smaller in size, each of these entities is a competitor. Further, a number of these entities both Indian and foreign could also be significantly larger than it in size, which would give them the benefits of economies of scale and other advantages. It competes on a number of factors including pricing, margins, products and services offered, and technology i.e. the efficiency, speed, user interface, and ease of operability of its digital and online platforms. In addition, competitive pressures and regulatory changes may also lead to downward pressures on its brokerage commission rates, which could also affect its financial condition and results or operations.
Risks related to its distribution business: The company distributes financial products issued by third-party institutions, including through its digital and online platforms. These financial products include mutual funds and portfolio management services, for which it has entered into agreements with the relevant third-party entities. The structure of third-party products that it distributes and services that it refers clients to may be complex and involve various risks, including credit risks, interest risks, liquidity risks and other risks. Further, it does not have any control over the performance of these products or the management of the third-party entities which issue these products.
Outlook
Anand Rathi Share and Stock Brokers is a Full-Service broking company. The company is a part of the Anand Rathi group which carries out a diverse range of financial services. The company has full service brokerage house with diversified revenue streams. The company has Pan India presence combined with robust digital capabilities for client acquisition and servicing. On the concern side, the company’s broking segment and MTF Business contribute a substantial share of its revenue. Any reduction in its revenue from broking segment or from its MTF Business could have a material adverse effect on its business, results of operations, cash flows and financial condition. Moreover, the company has high working capital requirements and any failure in arranging adequate working capital for its operations may adversely affect its business, results of operations, cash flows and financial condition.
The issue has been offering 1,89,74,029 shares in a price band of Rs 393-414 per equity share. The aggregate size of the offer is around Rs 745.68 crore to Rs 785.52 crore based on lower and upper price band respectively. Minimum application is to be made for 36 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations increased by 24.04% from Rs 6,817.88 million in Fiscal 2024 to Rs 8,456.98 million in Fiscal 2025. Moreover, the company’s profit for the period increased by 34.05% from to Rs 772.90 million in Fiscal 2024 to Rs 1,036.06 million in Fiscal 2025.
The company proposes to substantially increase its MTF Business as it has the potential to improve client stickiness, consolidate client investments and drive higher average revenue per client. It continues to see strong demand for MTF across a large section of its existing clients and intend to utilise a part of its Net Proceeds towards long-term working capital requirements of the company. Further, the company’s focus is to become a comprehensive investment solutions provider for all its clients' investment needs. Brokers have expanded their offering to include investment advisory, AIF/PMS, and distribution of financial products like mutual funds. Its assets under management (comprising mutual funds, portfolio management services and alternative investment funds) have grown from Rs 31,572.00 million to Rs 64,598.27 million between Fiscal 2023 and Fiscal 2025, representing a CAGR of 43.04%. It also intends to increase its client wallet share by continuing to augment its distribution of investment products business.
