Should I subscribe or not?

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The Rs 538.61 crore Prudent Corporate Advisory Services IPO will be available for subscription until Thursday, May 12, 2022, and the company’s price range has been set at 595-630 rupees per share.

Prudent Corporate Advisory Services is one of the leading independent wealth management services groups (non-banks) in India and is among the leading mutual fund distributors in terms of average assets under management and commissions earned. The company offers a comprehensive technology-based financial and investment services platform with end-to-end solutions essential to the distribution and presence of financial products across online and offline channels.

The IPO is an offer for sale of up to 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 offering and all proceeds will go to selling shareholders.

Currently, investor Wagner owns 39.91% of the shares and Shirish Patel, a full-time director and CEO of the company, owns 3.15% of the shares.

Half of the issue size was reserved for qualified institutional buyers (QIBs), 35% for retail investors and the remaining 15% for non-institutional investors.

Investors wishing to subscribe to Prudent IPO can bid on numerous 23 stocks and multiple thereafter. In the upper price range, they will pay Rs 14,490 for a single package of prudent business advisory services. The shares will be listed on both the BSE and the National Stock Exchange (NSE).

Applicants should also note that the cut-off time for UPI warrant confirmation is Friday, May 13, 2022, until 12:00 p.m. Failure to do so may result in their application not being considered.

Equirus Capital, ICICI Securities and Axis Capital are the lead managers of the offering while Link Intime India is the registrar of the issuance.

Ahead of embarking on the IPO, Prudent Corporate Advisory Services on Monday raised more than Rs 159 crore (Rs 1,59,43,10,130) from 24 lead investors instead of 25,30,651 shares at Rs 630 each, stock market data showed .

Major investors include Societe Generale, Kuber India Fund, DSP Mutual Fund (MF), HDFC MF, Axis MF, L&T MF, UTI MF, Canara Robeco MF, Motilal Oswal MF, Aditya Birla Sun Life MF, Kotak MF and HSBC MF .

The research team of Anand Rathi Share and Stock Brokers in their IPO note recommended to “subscribe” to the offer with a long-term horizon.

Anand Rathi Research in its report noted, “At the upper end of the IPO price range, Prudent Corporate Advisory Services Ltd. is offered at a P/E of 33.9x its FY22 annualized earnings, with a market capitalization of Rs 26,086 million. The company has a scalable, lean model in a high-growth, underpenetrated Indian asset management industry with a diverse distribution network. The company reported a RoNW of 28.73% in FY21. However, the IPO price is high and the company will need to continue to grow its business at a high growth rate, in order to justify valuations – that’s why we give the IPO a “Subscribe (long term)” Evaluation.”

The share allotment is expected to take place on Wednesday, May 18, 2022 and the shares are expected to list on Monday, May 23, 2022, according to the schedule set out in the Red Herring Prospectus (RHP).

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