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Prudent Corporate Advisory Services’ Rs 538-crore IPO opens May 10; price band fixed at Rs 595-630

Prudent Corporate Advisory Services has set the price band for its IPO (Initial Public Offering) at Rs 595-630 per equity share of face value Rs 5 each.

Prudent Corporate Advisory Services' IPO will open on Dalal Street on May 10 next week.

Prudent Corporate Advisory Services has set the price band for its IPO (Initial Public Offering) at Rs 595-630 per equity share of face value Rs 5 each. The independent retail wealth management services firm’s IPO will open on Dalal Street on May 10 next week. The issue is entirely an offer for sale by existing investors of the company. Prudent Corporate Advisory is amongst the top mutual fund distributors in terms of average assets under management (AAUM) and commission received. Ahead of the issue, shares of Prudent were trading at a grey market premium of Rs 35 per share in the unlisted space.

According to the Red Herring Prospectus of the company, the issue will consist of 85,49,340 equity shares as part of the OFS and no fresh issue. At the upper end of the price band, the company will raise Rs 538.60 crore through the issue. Of the OFS, 82,81,340 equity shares will be offloaded by Wagner Limited, an investor holding a 40% stake in the pre-offer capital. RHP of Prudent Corporate Advisory defines Wagner Limited as a group company. The other selling shareholder is Shirish Patel, trimming his stake by selling 2,68,000 equity shares. Currently, Shirish Patel owns a 3.15% stake in Prudent Corporate Advisory. Sanjay Singh, the promoter of the company, is not selling shares through the issue. He owns a 43.36% stake in the company.

Investors can bid for Prudent Corporate Advisory Services IPO from May 10. Bids can be made for a minimum of 23 equity shares and in multiples thereafter. The IPO will have a reservation for employees of the company, who will also get a discount of Rs 59 per equity share. 50% of the entire IPO has been reserved for Qualified Institutional Buyers (QIB) while 15% has been kept for Non-Institutional Investors. 35% of Prudent Corporate Advisory Services’ IPO has been reserved for retail shareholders. Being entirely an OFS, the company will not receive any funds from the IPO.

According to a note by Axis Capital, Prudent Corporate Advisory is an important interface between asset management companies and mutual fund distributors or independent financial advisors. The company has a pan-India presence with a network of 23,262 MFDs representing 18.46% of the industry as of December 31, 2021. Highly scalable, asset-light and cash generative business model, Pan-India diversified distribution network with the ability to expand, and a track record of innovation and use of technology are some of the strengths of the company, according to Axis Capital.

Upon successful listing, Prudent Corporate Advisory will join listed peers such as IIFL Wealth Management, ICICI Securities, CDSL, Computer Age Management Services, HDFC AMC, Nippon Life Indian Asset management, and UTI Asset Management. 

ICICI Securities, Axis Capital, and Equirius Capital are the book running lead managers to the issue. 

Prudent Corporate Advisors has registered a profit of Rs 21 crore, Rs 27.85 crore, and Rs 45.3 crore in the last three financial years preceding FY22. The company has also seen a rise in revenue from Rs 221.98 crore in the financial year 2019 to Rs 286.5 crore at the end of the financial year 2021.

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