Shares of Prudential Corporate Advisory Services listed at a premium on Friday, the shares started trading at Rs 660 per share on the BSE, up 4 per cent from the issue price of Rs 630. -630 a share, received bids for 73.29 lakh equity shares against the offer size of 60.18 lakh equity shares, subscribed 1.22 times on May 12, the last day of bidding. Retail investors bid 1.29 times the allotted quota and employees bid 1.23 times the reserved share. The portion allotted to non-institutional investors was booked 99 per cent, while the portion of Eligible Institutional Buyers (QIB) was booked 1.26 times.
The issue was entirely an offer for sale (OFS) by existing shareholders of the company who would offload 85,49,340 shares with a face value of Rs 5 each. The company will not receive any income from the issue. Most brokerages advise investors to be cautious when subscribing to issues. According to experts, the company’s high bid for the IPO was the main reason for the relentless response to the issue. A fair assessment could be a good response, they said.
Prudent is one of the major independent retail asset management service groups in India (excluding banks) and one of the top mutual fund distributors in terms of average assets and commissions under management. With the advent of many fin-tech players, the competitiveness in the financial product distribution industry has intensified. “The company may be challenged to maintain its 25 percent margin in the future,” said a report by Choice Broking.
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“Prudential Corporate Limited has debuted at Rs 650 which is 3.2% more than the issue price on NSE. The company’s delicate listing can be attributed to the rich value of the issue and the competitive and regulated nature of the industry. The company operates in the Indian asset management industry and has a consistent track record of profitable growth due to its highly scalable, asset-light and cash-generating business model. We recommend that long-term investors gradually reduce this stock. Those who have applied for enrollment gain can maintain a stop loss of Rs 600, ”says Santosh Meena, Head of Research, Swastika Investmart Limited.