CRISIL Ratings has assigned its 'A/Stable' rating to the bank loan facilities of Anand Rathi Share and Stock Brokers Limited (ARSSBL) while reaffirming the commercial paper programme rating, reflecting the company's strong fundamentals and strategic positioning in the capital markets business.

Rating Details and Rationale

The credit rating agency assigned the following ratings to ARSSBL's facilities:

The rating factors in ARSSBL's strong operational and financial linkages with its parent company, Anand Rathi Financial Services Ltd (ARFSL), which has an established 30-year track record in capital market businesses. The assessment also considers the company's diversified business risk profile, sound risk management systems supported by experienced senior management, and adequate capital position for current and planned operations.

Financial Performance and Capitalisation

ARSSBL demonstrated improved financial performance with reported profit after tax of INR 104 crore for fiscal 2025 compared to INR 79 crore for fiscal 2024. The company maintained healthy profitability in the nine months of fiscal 2026 with PAT of INR 90 crore.

The company's capitalisation strengthened significantly with networth increasing to INR 1,346 crore as of December 31, 2025, from INR 507 crore as of March 31, 2025. This substantial increase resulted from a primary capital infusion of INR 745 crore through an initial public offering completed on September 30, 2025.

Business Operations and Market Position

ARSSBL operates through a hybrid model comprising proprietary branches and an extensive franchise network. The company serves over 9.9 lakh customers with approximately 96,000 active clients as of December 31, 2025. The broking business maintains a market share of 0.3% in both cash and derivatives segments for fiscal 2025, with a higher 0.9% market share in the cash segment.

The company's revenue mix is diversified across multiple streams:

• Broking income: approximately 52%
• Interest income on margin trade funding: approximately 18%
• Distribution income: approximately 10%
• Other income (primarily float interest): 20%

Risk Management and Regulatory Compliance

CRISIL highlighted ARSSBL's sound risk management systems, noting that the company has maintained nil quarterly losses since inception. The entity adheres to all SEBI and exchange-prescribed regulations through requisite systems and processes. Key risk management features include real-time client exposure monitoring, scrip-wise exposure limits, upfront margin collection, and automated square-off mechanisms during adverse price movements.

Rating Outlook and Sensitivities

The stable outlook reflects expectations that ARSSBL will continue maintaining healthy capitalisation metrics while benefiting from its presence across capital market businesses and adequate risk management systems. However, CRISIL noted that the company's ability to improve market position and profitability will require monitoring, particularly given the elevated cost-to-income ratio of 78% and exposure to inherent market and regulatory risks in the broking industry.

Anand Rathi Share and Stock Brokers Limited has filed its quarterly monitoring agency report for the period ended December 31, 2025, providing detailed insights into the utilization of proceeds from its Initial Public Offer (IPO). The report, submitted to both BSE Limited and National Stock Exchange of India Ltd on January 21, 2026, demonstrates the company's adherence to regulatory requirements under SEBI regulations.

IPO Proceeds and Allocation

The company's IPO raised substantial funds through a fresh issue of equity shares. The financial breakdown shows the comprehensive utilization of these proceeds across designated objectives.

The monitoring agency, Crisil Ratings Limited, confirmed that all utilization aligned with disclosures in the offer document, with no deviations from the stated objects.

Fund Utilization Progress

The report reveals complete deployment of the allocated funds across the company's primary objectives. The working capital requirements received the largest allocation, reflecting the company's focus on operational expansion.

During the quarter ended December 31, 2025, the company deployed ₹394.81 crores towards creating new Fixed Deposits maintained as exchange margin with stock exchanges. These deposits were established to meet margin obligations with the exchanges where the company maintains membership.

Working Capital Deployment

The company's working capital requirements encompass critical operational areas that directly support revenue generation. The ₹5,500.00 crores allocated for long-term working capital serves multiple strategic purposes:

• Margin trading facility (MTF) operations
• Trade receivables management
• Other balances with banks for operational requirements

These funds support day-to-day operations and are classified as essential working capital for the company's stock broking and allied services business.

Regulatory Compliance and Monitoring

The monitoring report demonstrates full compliance with SEBI regulations, with Crisil Ratings Limited serving as the appointed monitoring agency. The report confirms no material deviations from expenditures disclosed in the offer document and no changes in the means of finance for disclosed objects.

The remaining unutilized amount of ₹44.37 crores from issue expenses is maintained in the public issue account, representing funds yet to be deployed for remaining issue-related expenses.

Corporate Structure and Leadership

Anand Rathi Share and Stock Brokers Limited operates under the leadership of promoters including Mr. Anand Nandkishore Rathi, Mr. Pradeep Navratan Gupta, Ms. Priti Pradeep, and Anand Rathi Financial Services Limited. The company specializes in stock broking and allied services, positioning itself as a significant player in India's financial services sector.

The monitoring report, signed by Company Secretary & Compliance Officer Chetan Prajapati, reflects the company's commitment to transparency and regulatory compliance in managing IPO proceeds.