Angel Broking shares list at 10% discount from IPO price; recoups some losses after initial trade

Angel Broking’s shares witnessed a lacklustre listing on Monday as the stocks were listed at Rs 275 per share and moved 3% higher to trade at Rs 284 apiece, minutes after opening. The listing was at a discount of 10% from the upper band of the initial public offering (IPO) price band at Rs 306 per share. After the recent rush of public issues in the primary market, the listing gains for the stocks have been diminishing. Last week Computer Age Management Services shares were listed on BSE at just a 23% premium and slid lower during the day’s trade despite a strong broader market performance.

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The Rs 600-crore IPO of Angel Broking included a fresh issue of Rs 300 crore and an offer for sale (OFS) of Rs 300 crore from existing shareholders. One of the largest broking houses in the country. “At the higher end of the price band, the issue is valued at 29x FY20 P/E (fully diluted), which seems fairly priced,” said brokerage and research firm Motilal Oswal in an IPO note. Angel Broking is among the largest brokers in the country with an active client base being the largest among any. 

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At the end of the subscription window, Angel Broking’s issue was subscribed 3.94 times, despite bearish market sentiment. Retail investors bid for shares 4.31 times, oversubscribing their portion of the offer that made available 68,85,246 equity shares to them. On the other hand Qualified Institutional Buyers (QIB) subscribed their portion of 39,34,425 equity shares 5.74 times. However, Non-Institutional Investors (NII) failed to fully subscribe to their portion.

Analysts see a wide margin of opportunity for Angel Broking with Indian households still having one of the lowest exposure to equity markets when compared to global peers. India’s contribution to the world share market capitalization is also very low, analysts say this means Angel Broking, which is already a major player in the broking business has enough market to add to its large customer base. Angel Broking’s client base has increased 36.81% CAGR from 1.06 million in financial year 2018 to 2.15 million at the end of the first quarter of this fiscal year.