More broking IPOs soon

Buoyed by the enthusiastic response to the IPOs of leading broking and investment banking firms, more and more industry players are eyeing the capital market route to raise funds.

If market sources are to be believed, about half a dozen players, including established names like Enam Securities, Anand Rathi Securities, Angel Broking and Anagram Stock Broking, are going in for an initial public offering to cash in on the soaring valuations in the stock broking space. Some of these firms, particularly those which have roped in private equity investors, may want to get listed to provide an exit route to their PE partners, said market sources.

Though none of these companies have announced any plans so far, market sources believe the timing is right, given the strong investor appetite for such stocks. Not to be missed is the fact that the recent IPOs of Edelweiss Capital and Religare Enterprises met with an overwhelming response from the public, attracting subscription several times higher than the respective offers. Religare debuted smartly on the bourses on November 21, while Edelweiss Capital is expected to list soon.

Enam Securities, one of the biggest investment bankers in the country, is understood to have initiated moves toward becoming a public listed company. Enam Securities chairman Vallabh Bhanshali, however, declined to comment on the subject. Anand Rathi Securities, which has placed a 20% equity stake with Citigroup Venture Capital, is also learnt to be looking at the IPO option. Company officials were not available for comment.

KR Choskey Shares and Securities, another prominent broking firm, intends to rope in an PE investor, though the company has not finalised its plans. “We are looking at the PE option but nothing has been decided as yet,” said KR Choksey Shares and Securities chairman Kisan R Choksey.

Riding high on the back of the historic bull run, broking and investment firms have recorded a significant growth in their activity and financial performance in the past 3-4 years. Their valuations have also soared to unprecedented levels amid accelerating flow of investments from global players. “Stock brokers are one of the biggest beneficiaries of the bull run. Many of them are raising funds to fuel further growth in areas like portfolio management services and wealth management” said Prime Database MD Prithvi Haldea.

Among players, which have successfully tapped the primary market in the past, include India Infoline, Indiabulls Financial Services, Motilal Oswal Financial Services, Religare Enterprises and Edelweiss Capital. All of them, except the yet to be listed Edelweiss Capital, have had a good run on the bourses post-listing. Their current market cap ranges between Rs 4,000 crore to Rs 15,000 crore

via Economic Times