Anand Rathi Share & Stock Brokers, one of India’s well-known full-service brokerage houses, is stepping into the public markets with its INR 745 crore IPO. The IPO is scheduled to open between 23–25 September 2025, it comes at a time when investor appetite for financial services companies is running high.
Anand Rathi Share IPO review aims to take readers beyond the surface-level numbers and into the core of the company’s business model. We will examine how the Anand Rathi earns money, the sustainability of its revenue streams, and what makes its operating model distinct in an increasingly competitive broking landscape dominated by both traditional and discount players.
Table of Contents
Company Overview & Legacy
Founded over three decades ago, Anand Rathi Share & Stock Brokers has built a strong reputation as a full-service brokerage house catering to India’s affluent and mass-affluent investor class.
- Network Reach: As of 31 March 2025, the firm operates through 90 branches across 54 cities, supported by a network of 1,125 Authorised Persons (APs) spanning 290 cities.
- Digital Presence: The company has developed a strong digital ecosystem, with platforms like Trade Mobi, AR Invest, MF Client, and Trade Xpress, making it easier for clients to access advisory and trading services.
- Client Base: Anand Rathi serviced 2,21,510 active clients in FY25, of which a notable 84.36% were above 30 years of age—a demographic that typically carries higher investible surpluses.
- Assets Under Custody (AUC): The company managed INR 60,823.97 crore in AUC, with 60.50% contributed by clients aged 30+.
- Employees: The company had a consolidated permanent workforce of 2,082 employees as of March 2025.
The firm’s focus on higher age and vintage clients has translated into superior Average Revenue per Client (ARPC), which stood at INR 29,347 in FY25—the highest among peers. Notably, 58.91% of clients have been with the company for more than three years, and 44.88% for over five years, underscoring client stickiness.
Anand Rathi Share IPO Review: Business Model Analysis
Anand Rathi runs on a full-service model, very different from discount brokers. Instead of chasing millions of low-value accounts, it focuses on fewer but wealthier, stickier clients — and monetises them across multiple products.
Broking & Advisory remains the backbone, contributing over 60% of revenues. But unlike discount players who thrive on derivatives churn, Anand Rathi draws more than half its brokerage from equity delivery trades. This gives the business a steadier, advisory-led profile, though it still moves with market cycles.
The real profit booster is the Margin Trading Facility (MTF), where clients borrow against pledged shares. MTF income has grown nearly 2.5x in two years, and clients using it generate 9x higher revenue per head than others. It’s Anand Rathi’s strongest differentiator.
On the diversification front, the firm distributes mutual funds, PMS, AIFs and bonds, doubling its AUM to over INR 6,400.0 crore in two years. Though still a smaller piece of the topline, this is Anand Rathi’s “annuity income”, less volatile than trading, and strategically positions it closer to a wealth manager than a plain broker.
Other services like IPO assistance and securities lending add incremental value, but the crux of the business is clear: a premium, advisory-driven brokerage that relies on sticky, affluent clients.
📌 In essence: Anand Rathi Share business model is reliable to the extent that it extracts more wallet share from fewer, wealthier clients. But it cannot fully escape the cyclicality of Indian capital markets — which means strong returns in bull phases, and pressure in prolonged downturns.
Anand Rathi Share IPO Analysis: Revenue Streams & Financial Performance
Anand Rathi share revenue streams are primarily drivern from three engines:
- Broking & related services (equity, derivatives, commodities, currency trading)
- Non-broking streams (Margin Trading Facility & Distribution of financial products)
- Other income (treasury operations: interest on deposits, securities, etc.)
(a) Segment-Wise Revenue Mix
| Particulars | FY23 | FY24 | FY25 | CAGR FY23–25 |
|---|---|---|---|---|
| Broking Segment | 317.27 (67.82%) | 457.81 (67.15%) | 510.27 (60.34%) | 26.82% |
| Non-Broking Segment | 104.99 (22.44%) | 132.32 (19.41%) | 192.59 (22.77%) | 35.44% |
| Other Income from Operations | 45.57 (9.74%) | 91.66 (13.44%) | 142.84 (16.89%) | 78.00% |
| Total Revenue | 467.83 | 681.79 | 845.70 | 34.45% |
- Broking remains the backbone (60%+ of revenue), but growth is maturing relative to non-broking.
- Non-Broking (esp. MTF & distribution) is scaling faster (35%+ CAGR), reducing dependence on pure broking.
- Other income is growing at the fastest clip (78% CAGR), largely from treasury yields—an opportunistic but less predictable source.
(b) Broking Income: Equity-Dominated
| Segment | FY23 | FY24 | FY25 | Mix FY25 | Trend |
|---|---|---|---|---|---|
| Equity Cash | 108.68 | 195.33 | 233.30 | 54.33% | Rising |
| F&O | 136.67 | 168.81 | 176.74 | 41.16% | Flat |
| Commodities | 10.00 | 11.63 | 14.34 | 3.34% | Modest growth |
| Currency | 18.76 | 19.80 | 5.03 | 1.17% | Declining |
| Total Brokerage | 2,74.12 | 395.56 | 429.40 | 100% | CAGR 25.0% |
- Equity cash business has become the growth driver, contributing more than half of brokerage revenues in FY25 (vs ~40% in FY23).
- F&O stagnation: Growth in derivative revenue has slowed, suggesting limited incremental gains despite rising market activity.
- Currency business collapsed in FY25 (INR 19.8 Cr → INR 5.0 Cr), pointing to client focus shift and intense competition.
- Equity orientation = higher stability compared to F&O-driven peers, but also means lower short-term trading churn.
(c) Margin Trading Facility (MTF): A High-ARPC Lever
- MTF Book Growth: INR 376.6 Cr (FY23) → INR 617.3 Cr (FY24) → INR 685.5 Cr (FY25); CAGR 34.9%.
- Revenue from MTF Interest: INR 542 Cr (FY23) → INR 759 Cr (FY24) → INR 1,143 Cr (FY25).
- Client ARPC Impact:
- Clients using MTF (FY25): ARPC INR 1,97,490 vs Non-MTF Clients: INR 21,206.
- MTF boosts ARPC ~9x, making it the single most powerful cross-sell driver.
MTF is a strategic differentiator. Despite zero NPAs in FY23–25, scaling comes with inherent credit & liquidity risks.
(d) Distribution of Financial Products
- AUM Growth: FY23: INR 3,157.2 Cr → FY25: INR 6,459.8 Cr (CAGR 43%).
- Revenue Contribution: INR 50.8 Cr (FY23) → INR 56.4 Cr (FY24) → INR 78.3 Cr (FY25).
Distribution remains small in topline (under 10%), but its scalability is high given India’s growing MF & AIF penetration.
(e) ARPC Advantage
- ARPC (Broking Revenue / Active NSE Clients):
- FY23: INR 26,012 | FY24: INR 30,922 | FY25: INR 29,347.
- Highest among peers, driven by:
- Older, stickier clients (45%+ with >5 years vintage).
- 84% of clients aged 30+, a segment with higher investible surplus.
- MTF adoption and personalized advisory focus.
(f) Profitability & Margins
| Metric | FY23 | FY24 | FY25 | Trend |
|---|---|---|---|---|
| EBITDA Margin | 24.6% | 33.8% | 36.8% | Expanding |
| PAT Margin | 8.1% | 11.3% | 12.2% | Expanding |
| ROE | 15.3% | 23.5% | 23.1% | Sustained |
| ROCE | 16.7% | 21.5% | 21.3% | Stable |
📌 Anand Rathi is transitioning from volume-driven growth to margin-rich, client-wallet-driven growth—a structural positive for long-term investors.
⚡ In essence:
- Broking still drives 60%+ revenue, but MTF and Distribution are the future growth levers.
- Strong ARPC gives it a premium positioning compared to discount broker peers.
- Margins are on a structural uptrend, validating its full-service, advisory-led approach.
Utilization of Funds
The company plans to raise INR 745 crore entirely via fresh issue. The proposed fund utilisation is as follows:
- Funding Long-Term Working Capital Requirements: INR 550 crore.
- General Corporate Purposes: Balance proceeds.
The primary focus is strengthening balance sheet liquidity for margin funding and scaling broking operations. With growing client activity in leveraged equity products, higher working capital is expected to enhance revenue streams from interest income.
Anand Rathi Share IPO Review: Shareholding Structure & Promoter
(a) Promoter Group
- Anand Nandkishore Rathi
- Pradeep Navratan Gupta
- Priti Pradeep Gupta
- Anand Rathi Financial Services Limited
(b) Pre-Issue Shareholding
The promoter-heavy structure indicates tight ownership, but the fresh issue ensures that new investors participate without promoter selling pressure—often seen as a positive signal of long-term commitment.
Anand Rathi Share IPO Analysis: Strengths vs Risks
| Strengths | Risks |
|---|---|
| Legacy & Brand Trust: Over 30 years of presence, strong client relationships, and established brand in full-service broking. | Competition: Discount brokers like Zerodha, Groww, and Upstox capture retail clients with low-cost models. |
| High ARPC: FY25 ARPC at INR 29,347, highest among peers. 59% clients have 3+ years vintage, 45% have 5+ years vintage → sticky, premium client base. | Market Dependence: Brokerage and MTF revenues are highly cyclical and tied to trading volumes and investor sentiment. |
| Diversified Business Model: Broking (60% of revenue) + Margin Trading Facility + Distribution (₹64,598 mn AUM) + niche services (algo trading, IPO assistance, securities lending). | Regulatory Risks: SEBI’s evolving rules on margin funding, distribution fees, and transaction charges can affect revenues. |
| Digital Ecosystem: Proprietary platforms like Trade Mobi, AR Invest, and Trade Xpress blend digital ease with advisory strength. | MTF Risks: While MTF boosts ARPC 9x, it exposes the firm to credit and liquidity risks if client defaults spike. |
| Financial Strength: ROE ~23%, EBITDA margin ~37%, PAT margins above 12%, and no promoter exit in IPO (only fresh issue). | Promoter Concentration: Pre-IPO, ~98% equity held by Anand Rathi Financial Services Ltd, raising governance concerns. |
Anand Rathi’s client stickiness, ARPC leadership, and diversified revenues are strong positives, but the company must navigate competition, regulatory tightening, and cyclicality to sustain its growth.
Wrap-Up
Anand Rathi Share & Stock Brokers is entering the markets with a INR 745 crore IPO, backed entirely by a fresh issue. The offering combines the strength of a full-service advisory-led model with the momentum of India’s expanding capital markets.
- Positives: Strong profitability (ROE 23%, EBITDA margin 37%), premium client base, diversified income streams, and no promoter dilution.
- Negatives: Competition from discount brokers, dependence on market cycles, and credit risks in the margin funding book.
Anand Rathi Share IPO review highlights that the company is best suited for investors looking for exposure to a premium brokerage play with proven profitability and strong client economics. While near-term earnings remain sensitive to market conditions, the company’s diversified model and high ARPC positioning make it a long-term structural story in India’s capital markets ecosystem.
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