The initial public offering of CMS Info Systems has subscribed 40 percent on the first day of bidding, on December 21. It has received bids for 1.48 crore equity shares, against the IPO size of 3.75 crore equity shares.
The company is planning to mobilise Rs 1,100 crore through its public issue, of which Rs 330 crore was raised on December 20 from anchor investors including Nomura India, WF Asian Reconnaissance Fund, Goldmans Sachs, Abakkus Emerging Opportunities Fund, and Theleme India Master Fund.
Retail investors have put in bids for 79 percent of shares reserved for them. Non-institutional investors portion booked 1 percent, while qualified institutional investors are yet to put in bids for the offer.
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The price band for the offer, which will close on December 23, is Rs 205-216 per share.
"At the upper band of Rs 216, the issue is priced at P/E (price-to-earnings) of 19.5x to its FY21 earnings. This multiple is in line with the multiples of other listed companies in India that are engaged in similar line of business," said KRChoksey Research.
Further, the brokerage said, "the issue is priced at 25 percent discount to Prosegur Compañía de Seguridad, a company incorporated in Spain, offering services in Euro Zone and global leader in cash management services."
Also read - CMS Info Systems IPO opens: 10 key things to know before subscribing to the issue
Given that the entire issue is an offer for sale, which means existing promoters are selling their stake and no money will come into the company for its business need, "this makes us little uncomfortable about the reason and timing for the issue," said KRChoksey.
However, "we are comfortable on the valuation front and the medium term outlook on the business as increase in velocity of physical currency in circulation is a sweet music for the company," said the brokerage, recommending investors to subscribe for listing gains.
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CMS Info Systems is India's largest cash management company in terms of number of ATM points and the number of retail pick-up points as of March 2021. It is also one of the largest ATM cash management companies worldwide based on the number of ATM points as of FY21.
Its business includes installing, maintaining and managing assets and technology solutions on an end-to-end outsourced basis for banks under long term contracts.
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