As Prudent Corporate IPO launches today, should you subscribe to the issue?

Market


Prudent Corporate Advisory Services’ three-day initial public offering (IPO) is set to open today and conclude on Thursday May 12, 2022. The retail wealth management firm has set a price band of 595-630 per share for its share sale. The company on Monday said it has raised a little over 159 crore from anchor investors ahead of its issue.

The initial share-sale of 85,49,340 equity shares comprises an offer for sale (OFS) of 82,81,340 equity shares by Wagner Ltd and up to 2,68,000 equity shares by Shirish Patel. At the upper end of the price band, the firm will raise around 538.6 crore via IPO. 

As per market observers, Prudent Corporate shares are available at a premium (GMP) of 30 in the grey market today. The company’s shares are expected to list on May 23, 2022.

“We believe that prudent has a very strong retail focused business model which provides them with a distinct competitive advantage and will be difficult to replicate. However valuations are on the higher side as compared to peers which will limit gains in the near term and hence we have a NEUTRAL recommendation on the IPO,” said analysts at Angel One in a note.

Prudent Corporate Advisory Services is one of the leading independent retail wealth management services group (excluding banks) in India and is amongst the top mutual fund (MF) distributors in terms of average assets under management and commission received.

As of December 31, 2021, the company’s assets under management from the mutual fund distribution business (AUM) stood at 48,411.5 crore with 92% of their total AUM being equity-oriented.

“We recommend Subscribe on the following parameters that the financial penetration is expected to rise with the increase in financial literacy and is expected to continue growing at a healthy pace owing to strong demand- and supply-side drivers. Since the company is entering with a higher valuation is might be subject to corrections in near future,” said Jainam Broking.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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