Angel Broking off to a poor start, closes at 10% discount on debut day

It was a disappointing market debut for Angel Broking that failed to even go past get the Rs 300-mark during the day and finally settled around the opening levels with a 10 percent discount on October 5.

The stock closed at Rs 275.85, down 9.85 percent compared to the issue price of Rs 306, which was largely along expected lines.

The stock touched an intraday high of Rs 296.45 and a low of Rs 256.60 after opening at Rs 275.

On the National Stock Exchange, the opening price remained the same. It ended 9.87 percent lower at Rs 275.80 after hitting a day's high of 296.70 and low of Rs 257.

Angel Broking traded with volumes of 8,94,431 equity shares on the BSE and 85,46,238 shares on the NSE.

Angel Broking lists at discount, what should investors do?

This year, all the listings barring SBI Cards and Payment Services witnessed a minimum 10 percent premium on debut (Mindspace Business Parks REIT) and a maximum 115 percent (by Chemcon Speciality Chemicals). SBI Cards listed to 13 percent discount to its issue price of Rs 755 in March.

Given the rising competition in the broking industry and higher valuations, a weak listing was expected.

The retail broking house raised Rs 600 crore via public issue which comprised a fresh issue of Rs 300 crore and an offer for sale of Rs 300 crore by promoters and investors. The issue was subscribed 3.94 times during September 22-24.

Angel Broking is one of the largest retail broking houses in India in terms of active clients on NSE as of June 2020. The company grows its retail broking, margin funding and distribution businesses through online and digital platforms, Angel Broking Mobile App, trade.angelbroking.com, Angel SpeedPro, Angel BEE, which are powered by ARQ, a rule-based investment engine.

"In my opinion, brighter side for this industry is the shift of trading platform from offline to both online-offline has also surged the revenues countered by full-service brokers. Apart from broking business, now full-service brokers are eying new areas 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," Gaurav Garg, Head of Research at CapitalVia Global Research told Moneycontrol.

There is scope of growth in the sector but companies have to implement and execute their strategies well, he said.