Prudent Corporate IPO: Opens on May 10 & price band fixed Rs 595-630; find other details

Prudent Corporate Advisory Services Limited, an integrated wealth management service provider, will open its initial public offering (IPO) on Tuesday, May 10, 2022. The company has fixed the price band for the issue at Rs 595-630 per share. The issue will close for subscription on Thursday, May 12, 2022.

The retail investors can bid for a minimum of 23 shares and in multiples thereafter. In terms of the rupee value, an investor can bid for a minimum amount of Rs 14,490 for one lot, while the maximum amount that an investor can bid for is Rs 1,88,370 for 13 lots.

The company has allocated shares worth Rs 6.5 crore to its eligible employees, who will get a discount of Rs 59 per equity share during the bidding process. At the upper range of the price band, the company aims to raise Rs 538.6 crore through its initial stake sale.

The initial public offer comprises a pure offer-for-sale (OFS) of up to 85,49,340 equity shares by shareholders and promoters. The company will not get any proceeds from the issue. Wagner Ltd., an entity of TA Associates, will offload 82,81,340 equity shares or 50 per cent of its stake and Shirish Patel, Whole Time Director and Chief Executive Officer of Prudent, will sell around 2,68,000 equity shares. Wagner holds 40 per cent stake, while Patel has 3.15 per cent stake in the firm.

The initial public offering will have a reservation of 35 per cent for retail investors, while qualified institutional buyers (QIBs) will be able to participate in 50 per cent of the total issue size. Non-institutional investors will be able to participate in the remaining 15 per cent of the IPO size.

Equirus Capital, ICICI Securities and Axis Capital are the book running lead managers to the issue, whereas Link Intime has been appointed as the registrar to the issue.

The announcement of share allocation is likely to be made on May 18, 2022. Its shares are proposed to be listed on both NSE and BSE. The likely date for share listing is May 23, 2022.

Prudent Corporate Advisory Services Limited is an independent retail wealth management services group in India and is amongst the top mutual fund distributors in terms of average assets under management ("AAUM") and commission received (Source: CRISIL Report). The company offers a 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. The company has grown faster among national distributors (amongst the top 10 mutual fund distributors) in terms of commission and AAUM with a CAGR of 34.4 per cent and 32.5 per cent respectively for the five-year period ending Fiscal 2021 (Source: CRISIL Report).

The company has become an important interface between asset management companies ("AMCs") and mutual fund distributors or independent financial advisors ("MFDs") (and by extension, retail investors who avail services from such MFDs), over the last two decades. It is an independent platform with no single AMC contributing more than 15 per cent of our AUM as of December 31, 2021.

As on December 31, 2021, Prudent Corporate's assets under management from the mutual fund distribution business ("AUM") stood at Rs 484,114.74 million with 92.14 per cent of our total AUM being equity oriented. Its AUM has increased from Rs 166,677.52 million as on March 31, 2018, to Rs 484,114.74 million as on December 31, 2021, at a CAGR of 32.83% with its equity-oriented AUM increasing from Rs 138,657.92 million to Rs 446,059.12 million during the same period, at a CAGR of 36.49 per cent.

Among national distributors our market share on commission received basis has increased from around 4 per cent in Fiscal 2015 to around 12 per cent in Fiscal 2021. Its equity AUM of Rs 446,059.12 million as on December 31, 2021, represented 2.39 per cent of total equity AUM of mutual fund industry.