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    CAMS IPO subscribed nearly 47 times on Day 3

    Synopsis

    The price band for the issue has been fixed at Rs 1,229-1,230 and prospective retail investors need to bid for a minimum of one lot of 12 shares or in multiples thereof.

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    "Over the past 5 years, CAMS has further strengthened its market share from 61 per cent in March 2015 to 70 per cent in July 2020, based on AAUM serviced. With the MF RTA industry estimated to grow at an annual growth of 15 per cent over FY20-25E, we believe CAMS can also deliver similar growth going forward," said Nirmal Bang Securities.

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    NEW DELHI: Computer Age Management Services ' (CAMS) Rs 2,242 crore initial public offer (IPO) attracted nearly 47 times bids on Day 3 of the bidding process.

    The issue received bids for 60,19,36,188 6 shares, which was 46.93 times the issue size of 1,28,27,370 shares.

    The price band for the issue has been fixed at Rs 1,229-1,230 and prospective retail investors need to bid for a minimum of one lot of 12 shares or in multiples thereof.

    "Over the past 5 years, CAMS has further strengthened its market share from 61 per cent in March 2015 to 70 per cent in July 2020, based on AAUM serviced. With the MF RTA industry estimated to grow at an annual growth of 15 per cent over FY20-25E, we believe CAMS can also deliver similar growth going forward," said Nirmal Bang Securities.

    The Warburg Pincus-backed company last week raised Rs 666.57 crore from a total of 35 investors at Rs 1,230 per share, ahead of the public issue.

    On the block are 1,82,46,600 shares held by NSE Investments, which will offload 37.4 per cent stake, following a February 4 Sebi directive to exit the company completely. The quota for retail investors in CAMS IPO has been fixed at 35 per cent of the net offer. QIB quota is fixed at 50 per cent and the NII quota at 15 per cent. There is a reservation of up to 1,82,500 shares for employees.


    Motilal Oswal Securities has a subscribe on the issue with a long-term view as it believes that CAMS enjoys first mover advantage, asset light business model and high entry barriers.

    It noted that the company's top 5 clients contribute 71 per cent to its revenues, which along with technological disruption and data security & privacy pose risks.

    "At the higher end of the price band, the issue is valued at 35 times FY20 P/E, which seems fully priced in. However, we like the company, given its leadership position, integrated business model, pan-India presence and robust financials," it said.

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