CMS Info Systems, one of the largest cash management companies in India and the last one to list on the stock exchanges in 2021, is unlikely to create the enthusiasm seen when HP Adhesives and Supriya Lifescience debuted earlier this week.
Experts said the company’s shares could list at about the issue price of Rs 216, given the muted initial public offering subscription figures, lukewarm interest in the grey market and concerns over a third Covid-19 wave even though it has strong fundamentals and operational excellence.
The initial public offering of CMS Info Systems was subscribed 1.95 times during December 21-23. The portion for retail investors was booked 2.15 times and the quota for qualified institutional buyers saw 1.98 times subscription. Non-institutional investors bid for 1.45 times the shares reserved for them.
The Rs 1,100 crore IPO was a complete offer for sale by the promoter Sion Investment Holdings, an affiliate of Baring Private Equity Asia, at Rs 216 per share.
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“CMS Info Systems is expected to list around its issue price itself, based on the subscription numbers and grey market premium,” said Swapnil Shah, head of research at BP Wealth.
Astha Jain, senior research analyst at Hem Securities, expects a flat listing for CMS Info Systems, while Prashanth Tapse, VP for research at Mehta Equities said considering the lower-than-expected subscription demand during the IPO, they expect a lower single-digit or muted listing even though the issue was reasonably priced.
The risk for the cash management company could lie in the shift “towards cashless transactions and increased usage of digital currency, which can derail long-term growth plans. New investors also raised concerns over applying for an IPO that was a 100 percent offer for sale,” Tapse said.
CMS Info shares traded at a flat to 4.6 percent (Rs 10) premium over the issue price in the grey market, according to IPO Watch and IPO Central.
It 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.
The company’s profit jumped to Rs 168.52 crore in the year ended March 2021 from Rs 134.7 crore in previous year. The bottom line in FY19 was Rs 96.14 crore. Revenue from operations fell to Rs 1,306.09 crore in FY21 from Rs 1,383.24 crore in FY20. The top line in FY19 was Rs 1,146.15 crore.
Profit stood at Rs 84.47 crore on revenue of Rs 626.3 crore in the five months ended August.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.