Anand Rathi Wealth Ltd, part of Mumbai-based financial services group Anand Rathi, launched its Initial Public Offering (IPO) last week on December 3, which ends today. The price range has been set at ??530-550 per share. The company raised ??194 crore from key investors before its IPO.

As on Day 2, Anand Rathi Wealth’s IPO was underwritten 3 times, with the retail category overbooked 4.77 times, non-institutional investors bid 3.06 times and QIBs 17%, according to the BSE data.

The initial sale of the shares is entirely an offer to sell (OFS) of 1.2 crore of shares by the promoters and existing shareholders. At the high end of the price range, the initial stock sale should reach ??660 crores. Equirus Capital, BNP Paribas, IIFL Securities and Anand Rathi Advisors are the managers of the offer.

According to market watchers, Anand Rathi Wealth shares command a premium (GMP) of ??55 on the gray market today. The company’s shares are expected to be listed on the BSE and NSE on December 14.

Anand Rathi Wealth operates in the financial services industry with an emphasis on the distribution of mutual funds and the sale of financial products. The company began operations in fiscal 2002 and is a registered mutual fund distributor with AMFI.

“Considering the fundamentals and the potential for growth, the valuation of (ARWL) seems reasonable, as at the higher end of the price range the company is valued at ~ 7.5% of AUM and ~ 18, 7x EPS (annualized FY22E). The nearest IIFL Wealth listed peer has more than ??2.2 lakh crore in AUM and trading at 25xFY22E (consensus) also offers healthy growth potential. We remain positive in the space and give the IPO a SUBSCRIBE rating, ”ICICI Securities said in a note.

However, the brokerage considers that changes in the regulatory environment may impact the business and margins, increasing competition in the wealth management arena as a key risk and concern.

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