On BSE, Prudent was listed at Rs 660 on BSE, a mild premium of 5 per cent over its issue price of Rs 630. The scrip made its debut at a marginal premium of 3 per cent at Rs 650 on National Stock Exchange (NSE).
However, the counter witnessed a sharp selloff following the listing and dropped 13 per cent from its peak to Rs 576.50 on BSE. It did not race past the listing price even once.
Following the mixed performance at the debut, market experts are divided over the counter. A few suggest it as a long term play for the investors, whereas others are suggesting to exit the counter citing rich valuations.
Santosh Meena, Head of Research,
said that it operates in an underpenetrated Indian asset management industry and has a consistent track record of profitable growth due to a highly scalable, asset-light, and cash generative business model.
“We suggest long-term investors accumulate this stock gradually on dips,” he added. “Those who applied for listing gains can maintain a stop loss of Rs 600.”
Prudent is one of the leading independent retail wealth management services groups (excluding banks) in India and among the top mutual fund distributors in terms of average assets under management and commissions received.
Echoing the similar tone, Mohit Nigam, Head – PMS, Hem Securities said that due to unstable market conditions, Prudent Corporate Advisory Services Limited received a drab response from investors.
“Due to a highly scalable, asset-light, and cash-generative business strategy, the company has demonstrated a consistent track record of profitable expansion. As a result, we recommend holding the stock for the long term,” he added.
Through its initial public offering (IPO), Prudent Corporate Advisory Services raised Rs 538.61 crore by offering its shares in the range of Rs 595-630 apiece. The issue was open for subscription between May 10-12.
The issue got a muted response as it was overall subscribed 1.22 times. The portion reserved for qualified institutional buyers was subscribed 1.26 times, whereas HNI quota was subscribed 99 per cent. Retail portion was booked 1.23 times.
Saurabh Joshi, Research Analyst, Marwadi Financial Services said, “We have given avoid rating on Prudent Corporate Advisory Services IPO and listing was in line with our expectations.”
“The company made a debut on the exchanges with a tepid listing, at a marginal premium vanished quickly after the listing. Investors who have applied and got the allotment can exit the counter as valuations look stretched,” he added.
Supporting him, Piyush Chajed, Research Associate, Choice Broking said that the valuations were pricey, leaving no margin of safety for the investors.
“The company is operating in a highly competitive industry and thus maintaining margin at a higher level would remain a challenge for the company.”
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)