CMS Info Systems IPO: The public issue of the CMS Info Systems is set to close on December 23, Thursday and today is the last chance for investors to invest in its shares. The CMS Info Systems IPO opened for the public two days back and was subscribed 52 per cent as on the end of the second day of its issue. This was mainly backed by the retail investors category. CMS Info Systems is India’s largest cash management company based on number of ATM points and number of retail pick-up points as of March 31, 2021. The company is looking to mop up Rs 1,100 crore through its initial public offering, with 5.093 – 5.366 crore shares up for sale.
As of the end of the second day of bidding, the CMS Info Systems IPO was subscribed 52 per cent, where retail investors oversubscribed 1.02 times the portion set aside for them. On the contrary, non institutional buyers bid for just 4 per cent of the shares reserved for them, while Qualified Institutional Buyers were yet to place bids for the offer.
The CMS Info Systems IPO has a price band of Rs 205 to Rs 216 per equity shares, the company has notified. Ahead of its opening of the public issue, the company said it had raised Rs 330 crore through anchor booking by allocation of 1,52,77,777 shares.
The Rs 1,100 crore issue is entirely an offer for sale by selling promoter Sion Investment Holdings Pte. Ltd, which will receive all the proceeds from the issue. The promoter currently holds 100 per cent of the company. After the public offer, it will come down to 65.59 per cent.
The unlisted shares of CMS Info Systems IPO was fetching a premium of Rs 35 on Thursday, which is just 16 per cent of the upper price band of Rs 216. The low grey market premium of CMS Info Systems IPO indicated a tepid listing for the issue later this month.
CMS Info Systems Limited caters to a broad set of outsourcing requirements for banks, financial institutions, organised retail and e-commerce companies in India. They have a pan-India fleet of 3,965 cash vans and a network of 238
branches and offices in India as of August 31, 2021. The company’s services helps to increase the velocity of cash through the cash cycle by assisting customers to meet their outsourcing needs and increase the speed with which they handle cash by automating and decreasing duplication in the processing and turnaround of cash.
Most broking houses gave a positive rating to the CMS Info Systems IPO for long term subscription. “The company has further plans to expand into three
new business areas which include remote monitoring outside of the ATM
and banking sectors, end-to-end currency management and financial
services distribution. The company’s financials have been healthy and it has
posted revenue/PAT CAGR of 7 per cent /32 per cent over FY19-21. From a long term perspective, we have a positive view on the company,” said RReligare Broking in an IPO note.
Angel One in a note said, “At the higher end of the price band CMS would be trading at P/E multiple of 19x FY21 EPS of `11.4 which would be at a slight premium to SIS. Moreover CMS is primarily dependent upon the banking sector for most of its revenues and has high client concentration with top three customers accounting for 44.6 per cent of revenues for the first five months of FY2022. Moreover the company’s business would be impacted in case we witness a third Covid wave in India. Given the dependence on a single sector, high client concentration and possible impact on business due to a third Covid wave we have a NEUTRAL recommendation on the IPO.”
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