ICICI Securities IPO; A brief analysis for Investors

icici securities ipo

Whereas our markets are still suffering from a great selling pressure started earlier in February, our primary market is again getting very active. In this march, many new businesses are going to enter in Stock market through their IPOs. Few of them have already subscribed now while few are awaited to open for retail investors.

ICICI Securities IPO

One such IPO from the March list is of ICICI Securities. The price band of Rs519-520 values company around Rs 16,700 crore. Half of the revenue of ICICI securities comes from Broking business, whereas remaining revenue comes from other different sources like Banking investment, etc. During the end of 2017, ICICI was expecting to get valuations of ICICI Securities around Rs 25,000 crore but to collaborate with current market conditions, ICICI has lowered the price of IPO.

Overall, I would say that from a long-term perspective of investing in Broking business, ICICI securities is a good option because valuations are not so expensive. Also, the firm is considered among the leaders of Broking business in India. Past financial records of broking firm indicates that they have achieved more than 25 percent CAGR growth which is far better from many other related businesses growth rate.

At the same time, I don’t think that subscribing the IPO for the listing gains would be a great strategy. PE ratio of ICICI securities is around 33 which is little higher than others. And therefore, it lowers the possibility of IPO to get higher Grey market premium. We have already seen that past two IPOs of ICICI i.e Life Insurance and General Insurance businesses had got quite low public interest in the initial days of the listing. Therefore, it may possible that same pattern of movement would arise in ICICI Securities also.

However, if the market before IPO listing get some revovered, then i think we could see a good listing of ICICI securities for its subscribers.

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