Prudent Corporate Advisory Services IPO List: Shares of the retail asset management company, Prudent Stock, hit the stock markets Friday. The stock opened at Rs 660, at a premium of 4.7 percent to the issue price of Rs 630 on the BSE, while its listing on the NSE was Rs 650. The Prudent IPO, which opened between May 10-12 at a price band of Rs 595-630 per share, received bids for 73.29 lakh shares against a bid size of 60.18 lakh shares, with 1.22 subscriptions being made. on May 12, the last day of bidding. Retail investors have bought 1.29 times of the allocated quota and employees are bidding on shares 1.23 times the reserved portion. The Non-Institutional Investor portion is 99 percent booked, while the Qualified Institutional Buyer (QIB) portion is booked 1.26 times.
The initial share sale of 85,49,340 shares included an offer for sale (OFS) of 82,81,340 shares by Wagner Ltd and up to 2.68,000 shares by Shirish Patel. The company will not receive any proceeds from the issuance. Most brokers had advised investors to exercise caution when subscribing to the issue.
Prudent is one of the leading independent retail wealth management services groups (excluding banks) in India and is one of the top mutual fund distributors in terms of average assets under management and commissions received. Competition intensity in the financial product distribution sector has intensified with the arrival of many fintech players. “The company may face challenges to keep its margins at 25 percent going forward,” according to a report from Choice Broking.
It provides a technology-based, comprehensive investment and financial services platform with end-to-end solutions essential for the distribution of financial products and is present on both online and offline channels.
What should investors do now?
Santosh Meena, head of research, Swastika Investmart Ltd., said: “Prudent Corporate Ltd. has made its debut at Rs. 650 or 3.2 percent above the issue price. The company’s lukewarm listing can be attributed to its rich pricing. issuance and the competitive and regulated nature of the sector.The company operates in an under-penetrated Indian asset management sector and has a consistent track record of profitable growth thanks to a highly scalable, asset-poor and cash-generating business model.We suggest that long-term investors build this share gradually during dips. Those who have applied for listing profits can keep a stop-loss of Rs 600.”
Piyush Chajed, research associate, Choice Broking, said: “Prudent Corporate Advisory Services (PACL) listed at a discount in line with our estimate. We assigned the issue a ‘Subscribe cautiously’ rating because we were cautious about the valuation requested (at P/E of 33.9x on FY22E annualized EPS), which left no margin of safety for investors, as the company operates in a highly competitive industry, so keeping margin at higher levels remains a challenge.”
Mohit Nigam, Head – PMS, Hem Securities, said: “Due to volatile market conditions, Prudent Corporate Advisory Services Limited has received a dismal response from investors. The company operates in an under-penetrated Indian asset management sector with a CAGR of over 20 percent and a pan- Indian diverse distribution network with the potential to expand into underserved B-30 markets Thanks to a highly scalable, asset-poor and cash-generating business strategy, the company has demonstrated a consistent track record of profitable expansion, so we recommend share for the long term.”
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