At the upper end of the price range, a player in retail wealth management services aims to raise 538.61 million rupees with his initial share sales and estimates the issue at P / E 33.9x based on annual income of FY22.
Prudent is one of the leading independent retail asset management companies (excluding banks) in India and one of the main distributors of mutual funds in terms of average assets under management and remuneration.
The issue is an entirely offer for sale (OFS) from the company’s current shareholders who will release 85,49,340 shares with a nominal value of Rs 5 each. The company will not receive any profit from the publication.
Among the selling shareholders – Wagner Ltd, a unit of TA Associates, will release 82,81,340 shares and Shirish Patel, Whole Time Managing Director and Managing Director of Prudent, will sell up to 2,688,000 shares.
The company has allocated a total of 6.5 million rupees to its eligible employees, who will receive a 59 rupees discount on each share in the bidding process.
Investors can bid on a minimum of 23 shares and in multiples thereafter. The issue ends before subscription on Thursday 12 May.
Prior to the IPO, Prudent Corporate Advisory Services has raised 159.43 million rupees from 24 anchor investors by allocating a total of 25,30,651 shares to 630 rupees apiece, according to the BSE-uploaded circular.
Societe Generale, Kuber India Fund, DSP Mutual Fund (MF),
MF, Axis MF, L&T MF, UTI MF, Canara Robeco MF, MF, Sun Life MF, MF and HSBC MF are among the anchor investors.
Apart from mutual funds, Prudent distributes financial products such as collateral, asset management systems, bonds, unchanged investment funds, unlisted equities, securities brokerage, securities lending, NPS, among others.
On December 31, 2021, the company’s assets were managed from mutual fund (AUM) allotment transactions for 48,411.5 million rupees, of which 92.14 percent of their total AUM was equity-based.
The company provided 1,351,274 individual retail investment asset management services through 23,262 UCITS distributors between companies and consumers (B2B2C) and is distributed in 110 locations in 20 countries.
The company has reserved 50 percent of the net bid for eligible institutional buyers (QIBs), while non-institutional buyers (NIIs) will receive a 15 percent allotment. The remaining 35 percent of the shares will be given to the general public.
For the nine months ended December 31, 2021, Prudent Corporate Advisory Services reported a profit of Rs 57.62 million with revenue of Rs 327.99 million.
and Equirus Capital are the main executives of the publication, but Link Intime has been appointed registrar of the publication.
The issue has received conflicting advice from securities brokers, citing rich valuations, competitive industry and market instability as the key to the company’s growth prospects.
Those who are bullying in the matter are hopeful about the long-term growth of the company, thanks to its good performance, solid balance sheet, extensive experience and extensive India network.
Let’s look at what stockbrokers have to say about the share offering of prudent Corporate Advisory Services:
“We believe that Prudent has a very strong retail-oriented business model that gives them a distinct competitive edge and it will be difficult to repeat that,” said Angel One.
However, valuation is on the higher side compared to peers which will limit profits in the near future, it added with a “neutral” IPO recommendation.
Rating: Not rated
Despite sound financial performance, Religare has identified highly competitive industry, regulatory risk and capital market fluctuations as key business risks.
“With the upper price range of 630 rupees, the company seems expensive,” he added. “Therefore, we recommend that investors wait for better prices to enter the shares from a long-term perspective.
Rating: Subscribe for a long time
In the underdeveloped Indian asset management industry, it has grown by more than 20% CAGR with the ability to expand into underdeveloped markets, the broker said.
“The company has shown a steady track record of profitable growth due to its highly scalable, asset-based and money-creating business model,” it recommended, with a “Long-Term Guest Subscriber” rating for the publication.
Rating: Not rated
“Despite the company’s strong financial track record, state-of-the-art technology, huge distribution network in India, IPO pricing is fierce and hardly leaves anything significant on the table for investors in the medium term,” it said.
Marwadi Financial Services
Based on FY21 / FY22 (annual) EPS of 10.94 Rs / Rs 18.56 after issue, the company will register on P / E of 57.59x / 33.95x with a market value of Rs 2,608.6 million and its peers. . namely
and trading in PE is 27.3x and 12.6x.
“We give this IPO a ‘Avoid’ rating as the company is available at an expensive valuation compared to its peers. We believe that valuation is not in the interest of investors, “he added.
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