1:1 Bonus Issue For First Time By NBFC Stock, Record Date Before March-11; Buy Anand Rathi After Q3?

Anand Rathi Wealth Ltd, a financial products distributor, witnessed a weekly decline of 2.4% on BSE amidst its Q3 results announcement and first-ever bonus issue ratio of 1:1. Anand Rathi stock was under pressure despite double-digit growth in revenue and net profit during Q3FY25 and 9MFY25 period. Is there a buy-on-dips opportunity?

Anand Rathi Wealth Ltd Share Price:

On Friday, the NBFC stock stood at Rs 3974.80 apiece, marginally up on BSE, with a market cap of Rs 16,499.52 crore. The stock's 52-week high and low is at Rs 4,640.55 apiece and Rs 2,638.85 apiece respectively.

Anand Rathi stock's weekly performance was down by 2.4% from January 13-16. Year-to-date, however, the stock was up by nearly 1%.

Anand Rathi Wealth Ltd Bonus Issue:

The company has recommended the issuance of Bonus Shares by way of capitalization of reserves, in ratio of 1:1 i.e. 1(one) new fully paid-up Equity Shares of Rs. 5/- (Rupees Five only) each for every 1(one) existing fully paid-up Equity Shares of Rs. 5/- (Rupees Five only) each held by the eligible shareholders as on the Record Date, subject to shareholders approval through postal ballot and any other applicable regulatory and statutory approvals.

This will be the first ever bonus issue by Anand Rathi. The total number of bonus shares proposed for issuance is 4,15,10,317 equity shares of Rs. 5/-each.

It said the bonus equity shares will be issued out of free reserves and/or the securities premium account and/or the capital redemption reserve account of the Company available as of 31st December 2024.

The company plans to credit the bonus shares to the respective Demat account of the shareholders on or before 11th March 2025, subject to completion of the requisite formalities and approvals as and when required.

Anand Rathi Wealth Ltd Q3 Results:

Anand Rathi recorded double-digit growth in its consolidated financial results for the quarter ending December 2024 (Q3 FY25) and the nine months ending December 2024 (9M FY25).

For Apr-Dec 2024 (9M FY25), the company posted a consolidated net profit of Rs 227 crores, registering a Y-o-Y increase of 34%. Total revenue during this period rose by 33% to Rs 739 crores. While Q3FY25 revenue jumped by 30% to Rs 244.2 crore on a year-on-year basis, and that of PAT climbed y 33% YoY to Rs 77.3 crore.

By the end of the December 2024 quarter, Anand Rathi's assets under management surged by 39% YoY to Rs 76,402 crore.

Rakesh Rawal, Chief Executive Officer of Anand Rathi said, "As a part of our policy to reward our shareholders, the Board has approved one bonus equity share for every one equity share held by shareholders, subject to approval of shareholders. India's economy continues to grow steadily, driven by rising income levels and increased financialization. This shift is driving unprecedented financial activity and positioning wealth management industry exceptionally strong position. We believe that our business holds inherent growth potential of 20-25%, which we expect to sustain for many years. Our confidence stems from our uncomplicated wealth solutions for our clients to build their wealth seamlessly."

Should You Buy Anand Rathi Stock?

As per Trendlyne data, the consensus recommendation from 2 analysts for Anand Rathi Wealth Ltd. is HOLD. The 1-year average target price is at Rs 4250 apiece, signalling a 7% potential upside ahead.

About Anand Rathi Wealth Ltd:

Anand Rathi Wealth Limited is among India's leading wealth firms, catering to high and ultra-high-net-worth individuals. The company is in the business of private wealth with a unique and differentiative strategy for the clients. The company has a presence across 17 cities in India and a representative office in Dubai.