The maiden public offering of leading cash management company CMS Info Systems has managed to receive good response from investors on its last day of subscription. The offer has seen a 1.95 times subscription so far on December 23, backed largely by qualified institutional buyers and retail investors.
The offer has received bids for 7.32 crore crore equity shares against the IPO size of 3.75 crore equity shares.
Retail investors have put in bids 2.15 times the allotted quota and non-institutional investors have bid 1.45 times their reserved portion.
The portion reserved for qualified institutional buyers was subscribed 1.98 times.
Also read - CMS Info Systems trading at 16% premium in grey market; here's all you need to know
Incorporated in 2008, CMS Info Systems is said to be India's largest cash management company based on the number of ATM points and pick up points. It is planning to raise Rs 1,100 crore through its public issue, which is entirely an offer for sale by promoter Sion Investment Holdings Pte Limited, an affiliate of Baring Private Equity Asia.
The company's business includes installing, maintaining and managing assets and technology solutions on end-to-end outsourced basis for banks under long term contracts.
Also read - CMS Info Systems IPO– Should you subscribe?
The management of the company believes CMS is bound to benefit from the shifting trend towards outsourcing. As per the company, outsourced ATMs are expected to grow at a CAGR of 10 percent and outsourced organized retail points may see a CAGR of 13 percent over FY21-27.
India is the world's 3rd largest ATM market with significant under-penetration. "There are government incentives, too, favouring this sector. This gives CMS immense opportunities to scale up their business. They are supported by a senior management team comprising of highly experienced and qualified professionals," said BP Wealth.
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"At the upper price band of Rs 216 per share, the stock is valued at PE of 16.4x (based on FY22 annualized earnings) on post issue equity. The company has also displayed positive financial performance, therefore, we give a “subscribe” rating to this issue for the long term," the brokerage added.
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