Angel Broking makes a weak debut, lists at 10% discount against issue price

The Rs 600-crore IPO was subscribed nearly four times

Shares of Angel Broking made a weak debut at the bourses by listing at Rs 274, a 10 per cent discount against the issue price of Rs 306 per share on the BSE and National Stock Exchange (NSE).

The stock of the broking firm slipped as much as 16 per cent to Rs 257 in the intra-day trade against its issue price at the bourses. It opened at Rs 275 and touched a high of Rs 297 on the NSE. In comparison, the S&P BSE Sensex and Nifty50 index ended around 0.75 per cent higher on Monday. A combined 9.43 million equity shares were changed hands on the NSE and BSE today.

The Rs 600-crore initial public offering (IPO) of Angel Broking was subscribed nearly four times. The portion reserved for retail investors was subscribed 4.31 times, while quota for non-institutional investors was filled in 69 per cent. The portion for qualified institutional buyers (QIBs) was subscribed 5.74 times, data available on the exchanges showed.

Angel Broking, one of the largest retail broking houses in India, proposed to utilise the net proceeds to meet working capital requirements and general corporate purposes. The brokerage houses like Angel given its leading position in retail broking, robust technology platform, and innovative offerings. Considering the sharp rise in retail participation and ongoing industry challenges, top players are likely to gain market share. Meanwhile, revenue concentration, client concentration, highly competitive industry, and legal/other proceedings against promoters remain key risks for the company, Motilal Oswal Securities said in its IPO note.

Antique Stock Broking said that Angel Broking, recently transformed from full-service retail broker to discount broker, presents a unique dilemma - on the one hand, India's financialisation story has never been stronger and more durable, while on the other hand, the IPO pricing demands peak valuations at the time of whole new retail investors wave in the equity markets. This forces us to focus more on the risks rather than opportunities and more on the valuation rather than its ability to capture customers at a rapid pace. "Hence, despite being very constructive on India's financialisation theme, we believe that investors should wait for better price points," the brokerage said.