CAMS IPO

What is CAMS?

Incorporated in 1988, CAMS provides services to both mutual fund companies and investors. It provides services for verification, processing and receipt of non-financial and financial transactions for the BFSI sector, more prominently for the mutual fund industry. It also provides services to investors like consolidated account statement (CAS) generation, changing mandate and more.

The company is currently headquartered in Chennai. 

Few of its subsidiaries include:

• CAMS KRA
• CAMS Insurance Repository Services Ltd.
• Sterling Software Pvt. Ltd.
• CAMS Financial Information Services Pvt. Ltd.

IPO DETAILS

Particulars	Description
IPO Subscription Dates	September 21-23
Listing Date	On or about October 1, 2020
IPO Price Band	Rs 1,229-1,230 per share
Number of shares on offer	1,82,46,600
Face Value	Rs 10 per share
Minimum Bid Quantity	12
Leading Book Managers of the Issue	1) Kotak Mahindra Capital Company Ltd. 2) HDFC Bank Ltd. 3) ICICI Securities Ltd. 4) Nomura Financial Advisory and Securities (India) Private Ltd.

Share Portions Reserved For Different Investor Categories

There are different kinds of investors: retail, institutional, non-institutional who can participate in the IPO. There is some portion reserved for the employees as well.

Employee Reserve Portion	Up to 182,500 Equity Shares
Anchor Investor Portion	Up to 5,419,230 Equity Shares
Net QIB Portion	3,612,820 Equity Shares
Of the net QIB Portion: Mutual Fund Portion	Up to 1,806,410 Equity Shares
Non-institutional Portion	Not less than 2,709,615 Equity Shares
Retail Portion	Not less than 6,322,435 Equity Shares
Equity Shares outstanding prior to and after the IPO	48,786,800 Equity Shares

What is an RTA?

RTA’s aid asset management companies in record maintenance. They also provide services to mutual fund investors as a single-window reference point for all their mutual fund investment-related information.

CAMS IPO Employees Reservation

A discount of ₹122 per Equity Share is being offered Eligible Employee Bidding in the Employee Reservation Portion. up to 182,500 Equity Shares are reserved for employees. Note:

When using UPI as a payment method, the primary account holder in the bank and demat should be the same person. Use of 3rd party UPI ID or 3rd party bank account is not allowed.

When using ASBA, up to 5 CAMS IPO applications can be applied from the same bank that offers the 3rd Party ASBA IPO application.

HUF and Minors can only apply using ASBA from the banks that offer the 3rd Party ASBA IPO application. i.e. SBI, Axis bank. 

IIFL: Subscribe
The brokerage said at the upper limit of the price band, the issue is priced at 35 times FY20 EPS, which is a 10-15 per cent discount to listed AMCs, exchanges and depositories. It expects the stock to trade in-line with other comparables and further re-rate.

YES Securities: Subscribe

YES Securities values the issue at 26 times FY22 P/E and believes it is reasonable.

The brokerage said that the given CAMS would be a direct beneficiary of low MF penetration, but the growth would be lower given that fees are generally tiered in nature.

Choice Broking: Subscribe with caution

Based on its conservative estimate, Choice is expecting a 2.7 per cent CAGR rise in the topline growth for the company over FY20-23 to Rs 757.91 crore in FY23. 

It sees Ebitda and PAT to grow at 1.5 per cent and 6.4 per cent, respectively.

Risks to Investors

The 4 Lead Managers associated with the Offer have handled 17 public issues in the past three years out of which 6 issues closed below the issue price on the listing date.

The PE ratio based on diluted EPS for FY 2020 for the Issuer at the upper end of the Price Band is as high as 34.61.

Average cost of acquisition of Equity Shares for the Selling Shareholder namely NSE Investments Limited is Rs 187.86 per Equity Share and the Offer Price at the upper end of the Price Band is Rs 1,230 per Equity Share.

Weighted Average Return on Net Worth for Fiscals 2020, 2019, and 2018 is 31.40%

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