Subscribe to Computer Age Management Services: Choice Equity BrokingSeptember 20, 2020
Choice Equity Broking’s IPO report on Computer Age Management Services
Chennai-headquartered Computer Age Management Services Ltd. (CAMS), co-owned by NSE Investments, Warburg Pincus, Faering Capital, ACSYS Investments and HDFC Group – is a technology-driven financial infrastructure & services provider to mutual funds and other financial institutions. The company planning to raise up to Rs. 22,443mn through an IPO, which will open on 21st Sept. and close on 23rd Sept. 2020. The price band is Rs. 1,229 – 1,230 per share. On the direction of SEBI, NSE is fully divesting its stake in the company through this IPO. The issue is complete OFS and thus CAMS will not receive any proceeds from it.
Valuation and Outlook
The macros of mutual fund RTA is positive and is likely to witness a secular growth trend. CAMS have an asset light business model in the duopoly RTA market. It has debt free operations and demonstrated almost stable financial performance with significant cash flow generation. Also it is a consistent dividend paying company with an average payout ratio of over 55%. Despite positive fundamentals, we believe the demanded valuation is little stretched, so we assign a “Subscribe with Caution” rating for the issue.
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