List of IPOs for corporate advisory services: Shares of the retail wealth management services company, Prudent, hit stock markets on Friday. The stock opened at 660 rupees, a 4.7 per cent premium to the issue price of 630 rupees on the Bahrain Bourse, while the listing price on the New York Stock Exchange was 650 rupees. Range of Rs 595-630 per share, received bids for 73.29 thousand shares of stock against an offer size of 60.18 thousand shares of stock, and subscribed 1.22 times on May 12, the last day of bidding. Individual investors bought 1.29 times the allocated share and employees bid for shares 1.23 times the reserved portion. The portion reserved for non-institutional investors was reserved 99 percent, while the portion of eligible institutional buyers (the bank) was booked 1.26 times.
The initial stock sale of 85,49,340 shares consisted of an Offer for Sale (OFS) of 82,81,340 shares of Wagner Ltd stock and up to 2,68.000 shares of Shirish Patel stock. The Company will not receive any proceeds from the issuance. Most of the brokerages suggested investors to be careful while subscribing to the issue.
Prudent is one of the leading independent retail wealth management services groups (excluding banks) in India and among the largest distributors of mutual funds in terms of AUMs and commissions received. The competitive intensity of the financial products distribution industry is becoming more intense with the entry of many high-tech players. “The company may face challenges in maintaining its 25 percent margins going forward,” said a report from Choice Broking.
It offers a comprehensive technology-backed financial and investment services platform with comprehensive solutions necessary for the distribution of financial products and has a presence across online and offline channels.
What should investors do now?
Santosh Meena, Head of Research, Swastika Investmart Ltd. said: “Prudent Corporate Ltd. came out. in Rs. 650 or 3.2 percent above the issue price. The company’s lukewarm listing can be attributed to the rich pricing of the issue and the competitive and regulated nature of the industry. The company operates in the unpenetrated Indian asset management industry and has a proven track record of profitable growth due to a highly scalable, asset-light and cash-generating business model. We suggest that long-term investors gradually accumulate this stock on dips. Those who applied for the winning list can keep a stop loss of Rs. 600.”
“PACL is listed at a discount in line with our estimates. We assigned a ‘subscribe with caution’ rating to the issue because we were cautious about the valuation required (at a P/E of 33.9 times in the The company operates in a very competitive industry, so maintaining margin at a higher level will continue to be a challenge for the company.”
Mohit Nigam, President of PMS, Hem Securities, said: “Due to the unstable market conditions, Prudent Corporate Advisory Services Limited has received poor responses from investors. The company operates in the Indian non-penetrable asset management industry with a compound annual growth rate of over 20 per cent and a distribution network Diversified pan-India with potential to expand into underserved B-30 markets. Given a highly scalable, asset-light, cash-generating business strategy, the company has demonstrated a consistent track record of profitable expansion. As a result, we recommend holding the stock for the long-term.”
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