Prudent Corporate Advisory Services Limited is a financial sector company. The company is engaged in an independent retail wealth management segment. The company is amongst the top mutual fund distributors. It holds one of the largest Average AUM. The company offers a technology-enabled solution. Checkout Prudent Corporate IPO details.
It also offers comprehensive investment services along with the financial services platform. The company also provides end-to-end critical solutions in the financial sector. Prudent Corporate Services has both an online and offline presence. The company was established in 2003.
The service portfolio of the company includes Life Insurance and General Insurance solutions. It also provides stockbroking services. The company has started a new service of SIP with Insurance. It also offers a Gold Accumulation Plan as well as Asset Allocation services.
Prudent Corporate Advisory Services Limited provides digital wealth management (DWM) solutions on the digital front. The company is associated with numerous platforms. Some of them are FundzBazar, Policyworld, PrudentConnect, CreditBasket and WiseBasket. The company has a customer base of 13,51,274 retail investors. The customer base has been set up via 23,262 channel partners.
It’s major business operation is business-to-business-to-consumer, also known as the B2B2C network. It has 110 branches in 20 states of the country. The company is also connected with 42 AMCs as a distributor. Its latest result has registered 35.05 lakhs live folios and 15.25 lakhs live SIP.
OBJECTS OF THE IPO ISSUE:
- Prepayment of all the company’s loans, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
BASIS OF THE PRUDENT CORPORATE IPO OFFER:
The basis of the IPO Offer Price is as follows:
- Prudent Corporate Advisory Services Limited works in an underserved asset management market. It is the fastest-growing company in the segment. It’s growth with a CAGR of nearly 20%.
- The company is among the biggest and fastest-growing firms establishing a network. It has been used for the distribution of their financial services.
- The company has a granular retail AUM. It also holds skewed high-yield equity with an AUM mix.
- The company has an increased involvement with Mutual Funds. It also holds a long-term association with them.
- An established financial and operational track record. It uses innovation and technology in addition. This has enabled the company to improve its business operations as well as provide better customer service.
- Prudent Corporate Advisory Services Limited has a PAN India distribution network. It has developed a capacity for an underserved B-30 segment of the country.
- The company operates on a scalable asset-light business model. It has made it possible to effectively execute its Expansion Plans.
PRUDENT CORPORATE IPO DETAILS:
Prudent Corporate Advisory Services Limited has its headquartered in Ahmedabad. The company is ready to float its IPO in the market. The company recently got approval from SEBI after filling their DRHP. The IPO of the company is of 8,549,340 equity shares of the company. It is a purely OFS-based IPO offer. Post allotment, the company’s shares will be listed on BSE and NSE. It has allowed the company to build a stronger and more lasting relationship with mutual funds.
The IPO issue offer constitutes 20.65% of the post issue fully paid-up equity capital base of the company. The company also started an Rs. 59 per equity share discount for its employees. Post IPO offer, the fully paid-up equity capital of the company will remain the same. It will be at Rs. 20.70 crores. On the upper band of IPO, the company’s market share will be Rs. 2608.62 crores.
|IPO Opening Date||May 10, 2022|
|IPO Closing Date||May 12, 2022|
|Issue Type||Book Building Issue Type IPO|
|Face Value||Rs. 5 per Equity Share|
|IPO Price||Rs. 595 – Rs. 630|
|Market Lot||1 lot of 23 equity shares|
|Minimum Order Quantity||One lot corresponding to 23 equity shares of the company|
|Minimum Order Price||Rs.14,490|
|Maximum Order Quantity||13 lots corresponding to 299 equity shares of the company|
|Maximum Order Price||Rs.188,370|
|Listing At||BSE, NSE|
|Issue Size||8,549,340 equity shares of the company. The issue is Rs. 538.61 crores.|
|Fresh Issue||Rs. 0|
|Offer for Sale||8,549,340 equity shares of the company. The issue is Rs. 538.61 crores.|
|Employee Discount||Rs. 59 per equity share of the company|
|Basis of Allotment Type||% Of the Offer been allotted by IPO|
|Qualified Institutional Buyer||50|
|Basis of Allotment Date||May 18, 2022|
|Initiation of Refunds||May 19, 2022|
|The Credit of Shares to Demat Account||May 20, 2022|
|IPO Listing Date||May 23, 2022|
FINANCIAL TRENDS OF PRUDENT CORPORATE IPO:
|Particulars||For the year ending with the amount as in Rs. in millions|
|Profit After Tax||576.28||452.97||278.53||210.19|
|PARAMETER||MARCH 21||MARCH 20||YoY %|
|Earnings Per Share (Rs)||438.08||269.37||62.63|
|Book NAV/Share (Rs)||1524.59||1088.16||40.11|
|Tax Rate (%)||25.16||25.59||-1.70|
|Core EBITDA Margin (%)||21.57||19.87||8.55|
|EBIT Margin (%)||21.70||17.08||27.05|
|Pre – Tax Margin (%)||21.12||15.94||32.52|
|PAT Margin (%)||15.81||11.86||33.30|
|Cash Profit Margin (%)||18.64||15.24||22.30|
|Asset Turnover (x)||1.21||1.22||-1.10|
|Sales/Fixed Asset (x)||7.82||6.26||25.04|
|Working Capital/Sales (x)||2.33||2.54||-8.13|
|Fixed Capital/Sales (x)||0.13||0.16||-20.03|
|EV/Net Sales (x)||-0.47||-0.38||-25.61|
|EV/Core EBITDA (x)||-1.93||-1.84||-4.76|
|M Cap / Sales||0.00||0.00||0.00|
|Net Sales Growth (%)||22.00||5.79||280.16|
|Core EBITDA Growth (%)||46.28||16.42||181.81|
|EBIT Growth (%)||55.01||26.39||108.47|
|PAT Growth (%)||62.63||32.51||92.62|
|EPS Growth (%)||62.63||32.82||90.81|
|Total Debt/Equity (x)||0.02||0.07||-75.84|
|Current Ratio (x)||2.10||2.40||-12.34|
|Quick Ratio (x)||1.98||2.34||-15.13|
|Interest Cover (x)||37.55||14.97||150.77|
STRENGTHS AND OPPORTUNITIES OF PRUDENT CORPORATE IPO:
- Prudent Corporate Advisory Services Limited operates in a business segment that is still to grow on a large scale. The company is an underpenetrated AUM management company. The overall growth of the sector will lead to the company’s growth.
- In the last 3 years, the company has registered a very high growth rate. It registered a growth of 20% CAGR.
- The company has a granular retail AUM. It also stated that the focus is on shifting towards the high-yield equity AUM.
- Prudent Corporate Advisory Services Limited has a strong value proposition. It has helped the company to have a better and a long-standing relationship with the mutual funds subsequently.
- The company uses innovative methodology along with the technology for their business operation.
- It also has a Pan-India distribution network. The company has a higher focus on expansion into underpenetrated B-30 markets.
- The company has a strong offline as well as an online presence. The fundamentals and operation matrix of the company are solid.
- Prudent Corporate Advisory Service Limited is the largest organization engaged in standalone retail wealth management services. It has been considered when we exclude banks and brokers.
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WEAKNESS AND THREATS OF PRUDENT CORPORATE IPO:
- The company operates in a highly regulated environment. It needs to follow all the laws, regulations and government policies. Any non – compliance or default can lead to the cancellation of their license.
- The company’s business is highly dependent on its ability to add and retain Mutual Funds.
- The major threat to the company is its inability to grow at its past performance. The past quarter of the company was over excellent in terms of the AUM.
- The threat of changes in their mutual fund’s total expense ratio is another. Prudent Corporate Advisory Services Limited may experience a decrease in income and margins during regulatory changes. It will lead to a reduction in their revenue along with significant pressure on their financial data.
- Prudent Corporate Advisory Services Limited also worries about sustainability in bad times. It raises concerns about their prospects and plans in this highly volatile market.
- The company faces immense stiff competition. Earlier their business operation as a mutual fund and Insurance distributor was not very competitive. Therefore, after coming of the discount brokers such as Zerodha, Paytm Money, and Groww it has restricted their margins. The new players are also buying direct plans.
- On current valuations, the asking PE of 35 looks a bit expensive on the front of the IPO.
- In Conclusion, the worry of inflation and other factors such as a hike in the interest rates can hurt the company’s listing. On the short-term conditions, the listing doesn’t look to be effective.
COMPARISON WITH PEERS:
|Name of the Company||Face Value as in Rs.||EPS of the company as in Rs.||PE ratio||PAT of the company as in Rs. in crores||Market cap as in Rs. in crores|
|Prudent Corporate Advisory Services Limited||Rs. 5||Rs.19||34||Rs. 76||Rs. 2520|
|IIFL Wealth Management Ltd||Rs. 2||Rs. 65.13||26.6||Rs. 578||Rs. 15,560|
|ICICI Securities Ltd||Rs. 5||Rs. 42.85||12.3||Rs. 1,383||Rs. 16,948|
|Central Depository Services (India) Limited||Rs. 10||Rs. 29.78||42.8||Rs. 311||Rs. 13,292|
|Computer Age Management Services Limited||Rs. 10||Rs. 56.2||43.2||Rs. 274||Rs. 11,847|
|HDFC Asset Management Company Limited||Rs. 5||Rs. 65.32||30.8||Rs. 1,393||Rs. 42,892|
|Nippon Life India Asset Management Ltd||Rs. 5||Rs. 11.96||25.8||Rs. 744||Rs. 19,247|
|UTI Asset Management Company Ltd||Rs. 10||Rs. 42.09||18.6||Rs. 534||Rs. 9,940|
PROMOTERS OF Prudent Corporate LIMITED IPO:
The promoters of the company areas:
- Sanjay Shah
|Pre-Issue Share Holding||56.78%|
|Post Issue Share Holding||56.78%|
Prudent House, 3 Devang Park Society,
Panjarapole Cross Road, Ambawadi,
Ahmedabad 380 015, Gujarat
Tel: +91 79 4020 9600
C 101, 247 Park
L.B.S. Marg, Vikhroli (West),
Mumbai 400 083, Maharashtra
Tel: +91 22 4918 6200
LEAD MANAGER(S) OF PRUDENT CORPORATE IPO: