Prudent Corporate Advisory Services Ltd IPO
IPO Details
- Open Date 10-May-22
- Close Date 12-May-22
- Lot Size 23
- IPO Size ₹ 538.61 Cr
- IPO Price Range ₹ 595 to ₹630
- Min Investment ₹ 13,685
- Listing Exchange NSE, BSE
- Basis of Allotment 18-May-22
- Refunds 19-May-22
- Credit to Demat Account 20-May-22
- Listing Date 23-May-22
Prudent Corporate Advisory Services Ltd IPO Subscription Status
| QIB | NII | Retail | Emp | TOTAL | |
|---|---|---|---|---|---|
| Day 1 | 0.00x | 0.02x | 0.72x | 0.35x | 0.36x |
| Day 2 | 0.00x | 0.19x | 1.05x | 0.67x | 0.57x |
| Day 3 | 1.26x | 0.99x | 1.29x | 1.23x | 1.22x |
IPO Synopsis
Prudent Corporate Advisory Services, a wealth management firm, plans to raise funds via a pure sale of shares upto 85,49,340 equity shares.
As a part of the OFS, Wagner Ltd, an entity of TA Associates, will offload 82,81,340 equity shares and Shirish Patel, Whole-time Director and Chief Executive Officer of Prudent, will sell up to 2.68 lakh equity shares.
The lead manager to the issue is ICICI Securities Limited, Axis Capital Limited, and Equirus Capital Private Limited.
Objective of the Issue
The main objectives of the initial share-sale are:
• to provide some partial exit to the private equity firm
• achieve the benefits of listing the equity shares on the stock exchanges
About Prudent Corporate Advisory Services Ltd
Prudent Corporate Advisory Services is one of the largest independent retail wealth management services group (excluding banks and brokers) in India and are amongst the top mutual fund distributors.
It offers technology enabled, comprehensive investment and financial services platform with end-to-end solutions critical for financial products distribution and presence across both online and offline channels.
Since 2003, the business has provided wealth management services to 772,899 unique retail investors through 17,583 MFDs on the business-to-business-to-consumer (“B2B2C”) platform and are spread across branches in 105 locations in 20 states in India.
The firm offers digital wealth management solutions through FundzBazar, PrudentConnect, Policyworld, WiseBasket, Prubazar and CreditBasket.
In 2021, the firm distributed 86,988 policies, across life and non-life insurance segments, with an aggregate premium of Rs. 1,568.78 million, and total brokerage received amounting to Rs. 263.65 million
In 2021, there were 111,000 AMFI Registration Number (“ARN”) holders registered with AMFI, while the number of ARNs empanelled with the firm stood at 17,583, representing 15.84% of the industry.
Prudent Corporate Advisory Services Ltd Financial Status
Profit and Loss
Balance Sheet
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue | 286.51 | 234.83 | 221.98 |
| EBITDA | 61.91 | 46.67 | 38.21 |
| PAT | 45.30 | 27.85 | 21.02 |
| EPS (basic in Rs.) | 10.96 | 6.74 | 5.08 |
| ROE | 28.73% | 24.75% | 25.30% |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Total Assets | 284.93 | 196.08 | 193.22 |
| Share Capital | 1.03 | 1.03 | 1.03 |
| Total Borrowings | 2.61 | 7.76 | 22.87 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Net cash generated from / (used in) operating activities | 57.72 | 50.28 | 12.62 |
| Net cash from / (used in) investing activities | -27.67 | -4.77 | 12.47 |
| Net cash flow from / (used in) financing activities | -11.36 | -22.07 | -9.44 |
| Net increase (decrease) in cash and cash equivalents | 18.69 | 23.44 | 15.65 |
Peer Comparison
| Name of the Company | Total Revenue | Basic EPS | Nav Rs. per share | PE | RoNW% |
|---|---|---|---|---|---|
| Prudent Corporate Advisory Services Limited | 294.90 | 10.96 | 38.13 | NA | 28.73% |
| IIFL Wealth Management Ltd. | 1,659.02 | 42.24 | 321.77 | 39 | 13.06% |
| ICICI Securities Ltd | 2,586.17 | 33.14 | 56.55 | 21.4 | 5.86% |
| Central Depository Services (India) Ltd. | 400.63 | 19.17 | 88.04 | 69.7 | 21.88% |
| Computer Age Management Services Ltd. | 735.26 | 42.08 | 105.73 | 78.3 | 39.80% |
| HDFC Asset Management Company Ltd. | 2,201.74 | 62.28 | 224.28 | 47 | 27.76% |
| Nippon Life India Asset Management Ltd. | 1,419.34 | 11.04 | 50.29 | 36.5 | 21.91% |
| UTI Asset Management Company Ltd. | 1,198.63 | 38.97 | 255.31 | 26 | 15.27% |
IPO Key Points
-
Strengths
1. Operates in an underpenetrated Indian asset management industry, that has grown at a CAGR of more than 20%
2. One of the largest and fastest growing financial products distribution platforms
3. Has a granular retail AUM with a mix skewed towards high-yield equity AUM
4. Value proposition has led to increased participation and long-standing relationship with MFDs.
5. Track record of innovation and use of technology to improve investor and partner experience
6. Pan-India diversified distribution network with ability to expand into underpenetrated B-30 markets
-
Risks
1. Operates in a highly regulated environment, and existing and new laws, regulations and government policies affecting the sectors in which it operates could adversely affect the business
2. Depends on the ability to attract and retain registered MFDs on their platforms and any inability to retain them would impact the business
3. Inability to grow at the historical rates, measured in terms of AUM.
4. Recommendations, suggestions and advice provided by MFDs using the platform to their clients may be subject to errors or fraudulent behaviour and are beyond the company’s control
5. Any changes in the total expense ratio due to regulatory changes may reduce the distribution commission income as the revenue is dependent on certain AMCs and sustained ability to increase AUM as well as on the performance of the funds
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