May23 , 2022

Prudent Corporate IPO subscription status: Prudent Corporate IPO subscribed 57% on Day 2



New Delhi: The Rs 538.61 crore initial public offering (IPO) of Prudent Corporate Advisory Services received a muted response from investors as the issue received 57 per cent bids so far on the second day of the bidding process. The issue was subscribed 36 per cent on day 1.

The issue, which kicked off for bidding on Tuesday, May 10, can be subscribed till Thursday, May 12. The company is selling its shares in the range of Rs 595-630 apiece.

The IPO received bids for 34,04,391 shares against 60,18,689 shares on offer, as per data available with the NSE.

Retail Individual Investors (RIIs) category got subscribed 1.05 times, while non-institutional investors received 19 per cent subscription.

The issue is entirely an offer for sale (OFS) by the existing shareholders of the company who will offload 85,49,340 shares with a face value of Rs 5 each. The company will not receive any proceeds from the issue.

The company has allocated shares aggregating to Rs 6.5 crore for 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 retail wealth management services player is valued at a P/E of 33.9x based on FY22 annualized earnings. Investors can bid for a minimum of 23 shares and in multiples thereafter.

The issue has received mixed recommendations from brokerages. They are concerned about rich valuations, competitive industry and market volatility while some of the positives are sound performance, solid balance sheet, wide experience and pan India network.

“Based on our quick forecast, EPS is expected to increase to Rs 21.6 per share FY24E and thereby demanding valuation comes at P/E at 29x FY24E which seems stretched,” said Choice Broking in its IPO report.

The brokerage has given a ‘subscribe with caution rating’ on the issue as it believes the demanding valuation at Rs 2,608 crore is expensive, leaving no margin of safety for investors.

Ahead of its IPO, Prudent Corporate Advisory Services raised Rs 159.43 crore from 24 anchor investors by allocating a total of 25,30,651 equity shares at Rs 630 apiece, as per the circular uploaded on BSE.

ICICI Securities,

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

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