Subscribe to Computer Age Management Services: Angel Broking

Angel Broking has come out with its report on Computer Age Management Services. The research firm has recommended to ''Subscribe'' the ipo in its research report as on September 19, 2020

Broker Research

September 21, 2020 / 20:20 IST

Angel Broking's IPO report on Computer Age Management Services

Computer Age Management Services Ltd (CAMS) is India’s largest registrar and transfer agent (RTA) of mutual funds with an aggregate market share of approximately 70% based on mutual fund average assets under management (AAUM) managed by its clients and fastest growing RTA for last 5 years. CAMS is responsible for entire back end work of its mutual fund clients i.e. from account creation to processing to redemption and also provides statutory statements, transaction origination, operations, investor & distributor services, risk management services and compliance services. For all the above service, CAMS charges fees of 0.036% (FY20) on AUM managed by its clients. All 41 mutual funds outsource back end/operational work to RTA.

Valuation and Outlook

At the upper end of the IPO price band, it is offered at 34.6x its FY20 EPS and 11x its FY20 book value, demanding `6,000cr market cap, which we believe is reasonable. Given CAMS’ leadership position, huge growth potential of MF industry, strong return ratios, asset-light business and higher dividend payout ratio, we are positive on this IPO and rate it as SUBSCRIBE.

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