Ahead of Anand Rathi Wealth IPO, Founder & Chairman discusses business model, prospects with Anil Singhvi

Anand Rathi Wealth is one of the leading non-banking wealth solutions companies in India, which started operations in 1995 as Hitkari Finvest Private Limited. Over the past three years (2019, 2020 and 2021), it has been among the top three non-bank mutual fund distributors in terms of the revenues made from the gross commission. The company boasts 233 Relationship Managers (RMs) and 6564 active clients as of 31 August 2021. 

The company is launching its Initial Public Offering (IPO) on 2 December (Thursday) and the issue will end on 6 December. The price band is Rs 530-550 with a lot size of 27 shares. The entire issue worth Rs 660 cr is Offer For Sale (OFS). The minimum investment is Rs 14,850. 

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In today’s edition of ‘News Par Views’, Zee Business Managing Editor Anil Singhvi spoke with the Founder and Chairman Anand Rathi, and Feroz Aziz, Deputy Chief Executive Officer (CEO) of the company. 

The company started as a stockbroker and later diversified into wealth management, Rathi said. It has been one of the most profitable businesses, he added. In the wealth management business, the company has identified investors who can invest between Rs 5 crore and Rs 50 crore. The company helps them earn between 12-14 per cent income on their investment with the least risks.  

The Asset Under Management (AUM) for Anand Rathi Wealth is over Rs 30,000 cr. It is only growing and has risen over 22 per cent over the last three years. 

The company has prepared a mathematical model to help investors earn high returns via asset allocations in equities debts or mutual funds over a long-term period with minimum risk involved, the Founder said. 

On the business model, Aziz said that the company’s trial fee goes up as the NAV (Net Asset Value) goes up. The trail fees have been increasing year on year as the markets have been growing. The company also earns significant yield being one of the top companies, the Deputy CEO said adding that it has a better bargaining power against its peers. 

In FY21, the company witnessed a 0.9 per cent yield which is the industry's best and the competitors are operating at 0.5 and 0.6 per cent yield. 

The company’s 66 per cent assets in mutual funds are into equities as this is an asset class that can create higher value for an investor over a 5–10-year period, he further said. 

The trend of higher trial fees will continue, going forward, Aziz said.   

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देखिए IPO से पहले मैनेजमेंट से खास चर्चा..#AnandrathiIPO | @AnilSinghvi_ @rathi_online @feroze_azeez pic.twitter.com/4scYGejFvZ

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On the company’s plan to bring IPO around this time, Rathi said that there was optimism in the markets and the Indian economy is also looking good. The company’s growth will also continue, he further said.           

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)