Angel Broking files offer document with Sebi for IPO to raise Rs 600 crore

As of end-June, the company managed Rs 113 billion in client assets and operates around 1.1 million active broking accounts.

IPO News: Angel Broking filed its offer document with markets regulator Securities and Exchange Board of India (Sebi) on Wednesday. The company is looking at an initial public offering (IPO) of equity to raise Rs 6 billion, half of which would be new funds.

Sources say the offer will value Angel Broking around Rs 25 billion.

Through the IPO, promoter Ashok Thakkar and World Bank arm International Finance Corporation (IFC) will divest part of their holding. The new capital will be used for working capital requirements. ICICI Securities, Edelweiss Financial Services and SBI Capital Markets are managing the IPO.

Earlier this year, ICICI Securities, also a broking and investment banking entity, came out with an IPO which wasn’t received well by investors. Key listed brokers Motilal Oswal, IIFL and Edelweiss are not purely broking entities.

Angel Broking is an independent full-service retail broking house. The company offers services such as broking, advisory, margin funding and loan against shares. It offers broking services through digital platforms and 11,000-odd sub-brokers.

A CLSA report ranked Angel Broking seventh in terms of number of active clients as of March, with a four per cent market share. The top three on this measure were ICICI Securities, HDFC Securities and Zerodha. The top five in the4 segment have three bank-backed ones and one discount brokerage.

Full News Updates → Angel Broking IPO

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News Source: BS

ICICI Pru Life Insurance IPO: Should you invest?

The initial public offer (IPO) of the country’s largest insurer in the private sector, ICICI Prudential Life Insurance Corporation (I-Pru), opens today for subscription. On offer are 18.13 crore equity shares of Rs 10 each via book building route in price band of Rs 300-344/share.

According to reports, I-Pru had Rs 1.09 trillion worth of Assets under Management (AUM) as of June 30, 2016, making it one of the largest fund managers in India. Ahead of its IPO, it raised Rs 1,635 crore from anchor investors.

Here is a quick compilation of recommendations from leading brokerages on whether should you subscribe to the offer or not.

NOMURA

ICICI Prudential Life’s IPO price of Rs 300-334 per share implies a valuation of Rs 43,000-48,000 crore. On March-18 enterprise value (EV), this implies a valuation of 2.45-2.73 times which is a 20-30% discount to the multiple of HDFC+ Max Life combined.

Excluding excess capital (solvency at 200%), ICICI Pru Life’s EV multiple is 2.9-3.2 times March 2018 EV. This implies a 10-20% discount to the EV multiple for HDFC + Max combined. Our price target for ICICI Bank is Rs 285/share. Benchmarking ICICI Pru Life’s valuation to Rs 43,000 - 47,800 crore would imply 4-6% upside to our price target for ICICI Bank.

MOTILAL OSWAL RESEARCH

The company relies heavily on bancassurance and has tied up with ICICI Bank, Standard Chartered Bank and Capital Small Finance Bank for product distribution. Bancassurance accounted for over 58% of retail APE in FY16. We believe termination of one or more of these partnerships poses significant threats to the business over the medium-term.

That apart, over 80% of retail Annual premium equivalent (APE) for FY16 was in ULIPs. This makes the company prone to the cyclicality of the stock markets, as retail investors generally purchase ULIPs during stock market booms and vice-versa. This could impact new business premiums as well as margins. Additionally, the company has a low share of non-participating business, which is a  read full story

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