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CAMS IPO: Valuation, price to expectations. Key things to know before you invest

The ₹ 2,242-crore CAMS IPO will be an offer-for-sale of 1.22 crore shares by the promoters, Great Terrain Investment, NSE Investments, Warburg Pincus and Acsys Investments

India TV Business Desk India TV Business Desk
New Delhi Updated on: September 21, 2020 13:38 IST
CAMS IPO Open For Subscription: From valuation, price to expectations | Key things to know before yo
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CAMS IPO Open For Subscription: From valuation, price to expectations | Key things to know before you invest

CAMS IPO: Computer Age Management Services' (CAMS), a technology-driven financial infrastructure and service provider, launched its maiden initial public offering (IPO) for subscription on Monday, September 21. The IT services firm's issue will remain open until September 23, between 10:00 am and 5:00 pm each day.

The ₹ 2,242-crore CAMS IPO will be an offer-for-sale of 1.22 crore shares by the promoters, Great Terrain Investment, NSE Investments, Warburg Pincus and Acsys Investments. The IPO consists of an offer for sale of 1,82,46,600 equity shares where NSE Investments, a subsidiary of National Stock Exchange, will be selling its shares. Hence, all the money raised from public issue will go to NSE Investments and the company will not get any money from this offer.

Computer Age Management Services Limited (CAMS) is India’s largest registrar and transfer agent (RTA) of mutual funds with an aggregate market share of around 70% based on mutual fund AUM managed.

CAMS IPO Price Band:

The price band for CAMS IPO has been fixed at ₹ 1,229-1,230 per share. At the upper end of the price band, the IPO will fetch ₹ 2,242 crore.

CAMS IPO Lot Size:

Minimum application for retail at upper price band for one lot is ₹14,760. Retail investors are eligible to bid for a minimum one lot of 12 shares and in multiples of 12 shares thereafter, to a maximum of 13 lots. The shares will have a face value of ₹ 10 per share and will be listed on the BSE on October 1. Link Intime India Pvt Ltd is the registrar of the IPO.

  • Issue opens on: Sept. 21
  • Issue closes on: Sept. 23
  • Face value: Rs 10 apiece
  • Listing on: BSE
  • Minimum Bid: 12 shares (and in multiples of 12 shares thereafter)

CAMS IPO: What analysts say

According to Moneycontrol, almost all brokerage houses have assigned a 'subscribe' rating to the public issue citing leadership position in the sector of registrar and transfer agent (RTA) for mutual funds, zero debt, high return ratios, strong financials, strong relationship with AMCs, experienced management team, a proxy way to the growing mutual funds penetration, etc. In fact, they advised subscribing the issue with long term perspective given the potential going ahead.

"The opportunity landscape for the MF business in India is huge, given low penetration and financialisation of household (HH) savings, thus providing long-term visibility. At Rs 1,230 per share (IPO price), CAMS is priced at 35x FY20 EPS, at a 10-15 percent discount to listed AMCs, Exchanges and Depositories. We expect stock to trade in-line with other comparables and further re-rate," said IIFL Securities while assigning subscribe call.

Nirali Shah, Senior Research Analyst,Samco Securities told Mint: "We recommend investors to subscribe to the IPO for listing gains. The company has a robust business with strong market leadership indicated by a 70% market share in the mutual fund RTA industry. Given the high entry barriers and the near duopoly nature of the market, the moat of the company remains intact. CAMS has also delivered strong operating margins and shareholder returns consistently and maintains a clean balance sheet with negative working capital."

CAMS is based in Chennai. It provides dividend processing, transaction execution and investor interface services to the BFSI (banking, financial services and insurance) sector.

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