Skip to main content

Angel Broking lists at discount, what should investors do?

Source - Moneycontrol.com

If someone wants to buy Angel Broking, they should wait for a decent correction before adding this counter, Gaurav Garg of CapitalVia Global Research said.

Angel Broking disappointed investors on its market debut, starting off the day way below its issue price of Rs 306 on October 5 despite a strong market trend.

After opening at Rs 275, the retail broking house stock touched an intraday high of 296.45 and a low of Rs 256.60. It was trading at Rs 278, down 9.15 percent on the BSE at the time of publishing this copy.

Investors can exit fully or partially and invest in other stocks in the same industry that are better placed, analysts said.

Angel Broking's listing looks even more lacklustre when compared to the start other companies, which too launched their IPOs in recent weeks, got. Mindspace Business Parks REIT, Route Mobile, Rossari Biotech, Happiest Minds, Chemcon Speciality Chemicals and CAMS all listed with at least 10 percent premium.

"Investors should partly exit on the listing day and hold partial quantity at least for next few years for decent returns," Gaurav Garg, Head of Research at CapitalVia Global Research told Moneycontrol.

Manali Bhatia, Head-Research at Rudra Shares & Stock Brokers, advised investors to exit the stock at the listing price.

"As we recommended avoiding the issue, we suggest to avoid buying on listing day as well. Its peers such as ICICI Securities and IIFL Securities are better options as they offer higher return ratios, ROE at 44.32 percent and 26.39 percent respectively and are better placed when compared to Angel," she said.

"Even at the upper price band of Rs 306, the stock is available at a P/E ratio of 26.75x, which is higher compared to peers. Also, the broking house is heavily litigated with issues & punched with notices. Earlier, SEBI banned trading on one of its promoter Lalit T Thakkar for two years. Considering all these factors, we believe the stock to go down to the levels of Rs 180-225 going ahead," she said.

If someone wants to buy the stock, they should wait for a decent correction before adding this counter, Garg said. He is not over-bearish on this sector as sees decent growth over the next five years.

However, Motilal Oswal Financial Services may perform well compared to Angel Broking in terms of valuation and growth, and JM Financial, too, can be included in the investor's portfolio, he said.



Angel Broking is one of the largest retail broking houses in India in terms of active clients on NSE, as of June 2020. It is a technology-led financial services company that offers broking and advisory services, margin funding, loans against shares (through one of the subsidiaries AFPL) and financial products distribution to clients.

The company raised Rs 600 crore via public issue. Of which, net proceeds (from fresh issue of Rs 300 crore) would be used for working capital requirements and general corporate purposes. The remaining part was offer for sale of Rs 300 crore received by promoters and investors via stake sale.

Garg believes the brighter side for this industry is the shift of trading platform from offline to both online and offline which has also pushed up the revenues countered by full-service brokers.

"Apart from broking business, now full-service brokers are eying new area of operations, which include asset management services, portfolio management services, insurance broking and mutual funds. These might help to boost revenues apart from their core business. So there is scope of growth in the sector but companies have to implement and execute their strategies well," he said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Comments

Post a Comment

Popular posts from this blog

Panacea Biotech shares hit 5% upper circuit after dengue vaccine completes phase I & II study

DengiAIl induced robust neutralising antibody responses against all the four dengue virus serotypes, the company has said in an exchange filing. Panacea Biotech share price hit 5 percent upper circuit on the BSE on September 24 after the company completed phases I and II study of its dengue vaccine candidate DengiAIl. "Panacea Biotec Ltd. is delighted to announce the successful completion of its Phase I/II study to evaluate the safety and immunogenicity of its vaccine, DengiAll, a single-dose liveattenuated tetravalent vaccine," the company said in an exchange filing. Live-attenuated vaccines contain weakened bacteria or viruses that trigger an immune response but do not cause disease. The company said DengiAIl induced robust neutralising antibody responses against all the four dengue virus serotypes. DengiAIl has been found to be safe and well-tolerated with no serious adverse effects, the company said. After a single-dose, more than 80 percent of the participants ...
Post a Comment
Read more

Check Chemcon Speciality Chemicals IPO allotment status in four simple steps

Equity shares will get credited into the accounts of eligible investors by September 30 and the listing of equity shares will be on October 1, 2020. Chemcon Speciality Chemicals, the manufacturer for pharmaceutical and oilfields industries, is expected to announce the basis of allotment early next week. As per the schedule provided by the company, the finalisation of the basis of the allotment will be done by September 28 and the initiation of refunds or unblocking of funds from ASBA account will take place on September 29. Equity shares will get credited to the accounts of eligible investors by September 30 and the listing will be on October The IPO comprised a fresh issue of Rs 165 crore and an offer for sale of Rs 153 crore by promoters. The company will utilise fresh issue proceeds for expansion of manufacturing facility, working capital requirements, and general corporate purposes. Chemcon manufactures specialised chemicals, such as Hexamethyldisilazane (HMDS) and Chloromethyl Iso...
Post a Comment
Read more

Taking Stock | Profit-booking pulls Nifty below 14,450; Sensex drops 549 points

  All the sectoral indices ended in the red with IT and PSU bank indices falling 2 percent each. The market remained under pressure on January 15 on the back of profit-booking across sectors amid weak global cues. At close, the Sensex was down 549.49 points or 1.11% at 49,034.67, and Nifty was down 161.90 points or 1.11% at 14,433.70. "The market witnessed profit-booking and following global trends. Nifty continues to resist 14,600 and has taken a dip towards 14,360. If the market closes below 14,380 levels, we might see a correction till the levels of 14,180-14,200. Momentum indicators like RSI, MACD are indicating a small correction in the markets," said Ashis Biswas, Head of Research at CapitalVia Global Research. All the sectoral indices ended in the red with IT and PSU bank falling 2 percent each. Broader markets performed in line with the main indices with BSE Midcap and Smallcap indices falling 1 percent each. Tech Mahindra, GAIL, HCL Tech, Wipro and ONGC...
Post a Comment
Read more