Kotak and Two Other Mutual Funds Bought 22 Lakh Shares of Prudent Corporate Advisory

The NSE benchmark Nifty 50 index ended Tuesday’s session in the red, marking its third consecutive day of decline, closing below the 22,900 mark.

The broader market indices experienced a sharp sell-off. Notably, one stock from the broader markets, Prudent Corporate Advisory Services, saw significant action in terms of bulk deals.

Prudent Corporate Advisory Services

Company Background

Headquartered in Ahmedabad, Prudent Corporate Advisory Services is one of India’s fastest-growing financial services groups. It ranks among the top mutual fund distributors in terms of assets under management and commission received. The company has evolved into a leading and respected distributor of mutual funds, insurance products, stockbroking, national pension schemes, unlisted securities, bonds, fixed deposits, portfolio management schemes, alternative investment funds, smallcase, and P2P products. Prudent Corporate Advisory Services boasts an asset under management (AUM) of Rs 834 billion.

Revenue Streams

The company’s revenue streams are categorized as follows:

• Distribution of Mutual Fund Products: 79.2%
• Distribution of Insurance Products: 13.8%
• Other Financial Products: 3.3%
• Stock Broking: 3.5%

Bulk Deals on Tuesday

On Tuesday, Prudent Corporate Advisory Services’ stock declined by 4.44%, ending at Rs 1,653.35 per share. However, it was notable for the bulk deal activity. TA FDI Investors sold 29.16 lakh shares of Prudent Corporate Advisory Services. As of March 31, TA FDI Investors owned a 7.04% stake in the company.

Key buyers in the deal included

• Kotak Mahindra Mutual Fund: Bought 16 lakh shares at an average price of Rs 1,650 per share.
• DSP Mutual Fund: Bought 3.23 lakh shares.
• Canara Robeco Mutual Fund: Bought 2.82 lakh shares.

Stock Performance

On a year-to-date basis, the stock has delivered returns of 37.45%. Over the past year, the stock has appreciated by 82.81%. The strong performance of the stock is attributed to its AUM growth. Prudent’s AUM grew at a compound annual growth rate (CAGR) of 39% between March 2021 and March 2024, compared to the industry’s 19%. The company’s AUM growth is driven by both organic and inorganic routes, outpacing industry growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.