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PRUDENT CORPORATE ADVISORY SERVICES LTD
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IPO Details:

IPO Opening Date

May 10, 2022

IPO Closing Date

May 12, 2022

Issue Type

Book Built Issue IPO

Face Value

₹5 per equity share

IPO Price

₹595 to ₹630 per share

Market Lot

23 Shares

Min & Max Order Quantity

23 & 299 Shares

Min & Max application amount

₹ 14,490& ₹ 188,370

Listing At

BSE, NSE

Issue Size

8,549,340 shares of ₹5
(aggregating up to ₹538.61 Cr)

Offer For Sale

8,549,340 shares of ₹5
(aggregating up to ₹ Cr)

Employee Discount

Rs 59 per share

Basis of Allotment Date

May 18, 2022

Initiation of Refunds

May 19, 2022

Credit of Shares to Demat Account

May 20, 2022

IPO Listing Date

May 23, 2022

Promoters

Sanjay Shah

Retail portion

QIB

NII(HNI)

 35%

 50%

 15%

Registrar

Link Intime India Private Limited

 

Company Profile :

 

       Incorporated in 2003, Prudent Corporate Advisory Services Limited provides retail wealth management services. The company offers Mutual Fund products, Life and General Insurance solutions, Stock Broking services, SIP with Insurance, Gold Accumulation Plan, Asset Allocation, and Trading platforms. Prudent Corporate Advisory Services provides investment and financial services platforms for the distribution of financial products through online and offline channels.

 

Objects of the Issue :

  The objects of the Offer are to :

 (i) to carry out the Offer for Sale; and

 (ii) achieve the benefits of listing the Equity Shares on the Stock Exchanges.

Our Company will not receive any proceeds from the Offer and all such proceeds will go to the Selling Shareholders.

 

Financial Details:

 

Particulars

Dec-21

Mar-21

Mar-20

Mar-19

Equity Share Capital

20.7

1.03

1.03

1.03

Reserves

194.1

156.61

111.48

82.06

Net worth as stated

214.8

157.65

112.52

83.1

Revenue from Operations

321.22

286.51

234.83

221.98

Revenue growth (%)

~

22%

5.79%

~

EBITDA

81.5

61.91

46.67

38.21

EBITDA (%)

25.37%

21.61%

19.87%

17.21%

Profit Before Tax

77.69

60.52

37.43

28.65

Net profit

57.63

45.3

27.85

21.02

EPS

13.94

10.96

6.74

5.08

RoNW (%)

26.83%

28.73%

24.75%

25.30%

PARTICULARS

Dec-21

Mar-21

Mar-20

Mar-19

Total asset

42.9

29.8

14.7

0.42

Total revenue

24.4

27

17.3

0.15

Net cash inflow/ (outflow)

-19

10.52

6.68

0.016

Source: RHP

 

Revenue from operations :

 

 

 

Dec-21

 

Mar-21

 

Mar-20

 

Mar-19

 

CATEGORY

AMT

(in Cr)

%

AMT

(in Cr)

 AMT

 (in Cr)

%

AMT

(in Cr)

%

Total Commission and fee income :

314.07

97.78%

277.56

96.88%

229.31

97.65%

215.37

97.02%

~ Distribution of Mutual Fund products :

271.39

84.49%

231.29

80.73%

195.59

83.29%

195.7

88.16%

~ Distribution of Insurance products :

23.37

7.28%

26.37

9.20%

17.04

7.25%

0.4

0.18%

~ Stock broking and allied services

15.19

4.73%

16.29

5.69%

13.68

5.82%

16.29

7.34%

~Other financial and non-financial products

4.12

1.28%

3.61

1.26%

3.01

1.28%

2.98

1.34%

INTEREST INCOME

3.15

0.98%

3.3

1.15%

4.78

2.04%

6.48

2.92%

NET GAIN ON FAIR VALUE CHANGES

4

1.24%

5.65

1.97%

0.74

0.32%

0.14

0.06%

TOTAL REVENUE FROM OPERATIONS

321.22

100%

286.51

100%

234.83

100%

221.98

100%

 

 

GEOGRAPHICAL PRESENCE  :

           As on December 31, 2021, they had branches in 50 locations across B-30 cities with 108 relationship managers and 196 total employees at these locations. Since March 31, 2018, they have opened branches in 38 locations, of which 22 have been opened in B-30 markets, with a calibrated and progressive approach towards branch expansion.

 

PEER COMPARISON  :

 

PARTICULARS

Prudent corporate advisory services ltd

IIFL wealth

ICICI

Securities

CDSL

CAMPS

HDFC AMC

NIPPON INDIA

UTI AMC

TOTAL INCOME

294

1659

2586

400

735

2201

1419

1198

EPS

10.96

42.24

33.14

19.17

42.08

62.28

11.04

38.97

NAV

38.13

321.77

56.55

88.04

105.73

224.28

50.29

255.31

P/E

~

41.9X

18.0X

74.7X

62.5X

32.9X

30.0X

24.4X

RoNW

28.73%

13.06%

5.86%

21.88%

39.80%

27.76%

21.91%

15.27%

Market Cap

~

1,55,238

1,92,655

1,49,628

1,28,127

4,35,941

2,03,163

1,20,474

 

KEY RISK FACTORS :

 

  • There is an outstanding criminal case in which the Economic Offences Wing has issued notices to Prudent Comder Private Limited (since merged with our Subsidiary, Prudent Broking Services Private Limited (“PBSPL”)), which if determined in an adverse manner, may result in a loss of license of PBSPL and consequently may adversely impact in future operations , reputation and profitability of the company.

 

 

  • Company’s business operations are highly dependent on information technology. Failure or disruption of our Information Technology (“IT”) systems may adversely affect its business, financial condition, results of operations and prospects.

 

 

  • Any reduction in  commission or brokerage of other financial products could have adverse effect on its business, financial condition, cash flows, results of operations and prospects.

 

 

  • If techniques and processes for managing risks are ineffective, company may be exposed to material unanticipated losses.

 

 

  • It may fail to detect money laundering and/or other illegal or improper activities in its business operations on a timely basis, which may have an adverse effect on the company.

 

 

  • Company have outstanding dues to creditors, which if not paid may lead to claims against  the Company and in turn adversely impact  reputation and results of operations.

 

 

  • Company have issued corporate guarantees in respect of certain bank guarantees submitted by our Subsidiary PBSPL, which if called upon, may subject  to additional liabilities and strain our cash flows.

 

 

 

  • Company’s business operations are highly dependent on information technology. Failure or disruption Company’s insurance coverage may not be adequate to protect it against all potential losses, which may have a material adverse effect on the business, financial condition and results of operations.

 

 

Summary :

 

               The company has focus on retail investors and SIP. The number of live SIPs on their platform being 15.3 Cr as of December 31, 2021, with the corresponding equity AUM from SIPs standing at 18949 Cr( representing 42.48% of the total equity-oriented mutual fund AUM) as of December 31, 2021. The number of active SIPs has increased from 0.079 Cr in Fiscal 2018 to 0.1030 Cr in Fiscal 2021 to 0.153 Cr as of December 31, 2021.

On the financial performance front, for the last three fiscals, PCASL has (on a consolidated basis) posted total income/net profits of ₹225.06 cr. / ₹21.02 cr. (FY19), ₹236.22 cr. / ₹27.85 cr. (FY20) and ₹294.90 cr. / ₹45.30 cr. (FY21). For the first nine months of FY22 ended on December 31, 2021, it has earned a net profit of ₹57.63 cr. on a total income of ₹328.00 cr. Thus, it kept enjoying higher margins on its business. 

For the last three fiscals, it has posted an average EPS of ₹8.56 and an average RoNW of 26.83%. The issue is priced at a P/BV of xx based on its NAV of ₹51.95 as of December 31, 2021, as well as post-IPO NAV and if we take FY22 EPS the IPO price , then it comes to  P/E of  33.94x which is in line with the peers , hence we recommend our clients to “Subscribe for long term”

 DISCLAIMER

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