Stockbroking and wealth management firm Angel Broking Ltd made a weak debut on the stock exchanges on Monday with its shares listing at a 10% discount before losing more ground in early trade.
Shares of Angel Broking began trading on the BSE at Rs 275 apiece compared with the initial public offering (IPO) price of Rs 306. The stock touched a high of Rs 296.45 and a low of Rs 256.60.
The stock eventually closed at Rs 275.85, down 9.85% from its issue price. The Mumbai-based market advisory firm now commands a market capitalisation of Rs 2,256.42 crore as against the valuation of Rs 2,500 crore it sought through the IPO.
The BSE’s benchmark Sensex closed at 38,973.70, up 0.71% after rising nearly 1.5% in early trade.
Angel Broking’s debut follows an IPO that was covered nearly four times with the help of retail individuals and institutional investors. The issue had failed to attract the interest of non-institutional investors comprising wealthy individuals.
The company’s performance is in sharp contrast to other recent listings. Angel Broking is the seventh company to list on the main board of the stock exchanges this year. SBI Cards and Payment Services Ltd, which went public in March, had received a very strong response to its IPO but had a subdued listing.
Five other companies – Rossari Biotech Ltd, Happiest Minds Technologies Ltd, Route Mobile Ltd, Chemcon Speciality Chemicals Ltd and Computer Age Management Services Ltd– all made strong debuts.
Another company, Anthony Waste Handling Cell Ltd, the first waste management services company in India to attempt an IPO, withdrew the public issue in mid-March as it failed to secure enough subscription.
Angel Broking counts the World Bank’s private-sector investment arm International Finance Corporation as its backer. IFC sold nearly one-third of its stake to fetch Rs 120 crore. After the IPO, IFC owns an 11% stake in Angel Broking after factoring the fresh issue of shares in the IPO.
Angel Broking joins a handful of listed peers such as Edelweiss Financial Services Ltd, Motilal Oswal Financial Services Ltd, JM Financial Ltd, IIFL Finance Ltd, Centrum Capital and Emkay Global Financial Services Ltd.
In March 2018, ICICI Securities Ltd went public with its maiden public offering but received a weak response from retail investors and wealthy individuals. This forced ICICI Bank Ltd, the parent company, to trim the issue size.
Angel Broking was established by Dinesh Thakkar in 1987 as a stock broking firm before being incorporated as a financial services company in 1997. Thakkar, in his individual capacity and also with his family members, owns about 50% stake in the company.
The company offers equity and commodity broking services, currency trading services, wealth management and portfolio management. It operates through nearly 11,000 sub-brokers across 110 branches in 1,800 cities and towns. The firm caters to over 11 lakh active clients.