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CAMS announces Rs 2,240-cr IPO; NSE to sell off entire holding

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Mumbai, Sep 16 (PTI) CAMS, which acts as a registrar and transfer agent (RTA) for mutual funds, on Wednesday announced its initial public offering (IPO), targeting to raise Rs 2,240 crore from investors amid the liquidity flush.

The offer will see sale of 1,82,46,600 equity shares or 37.4 per cent stake by NSE Investments, the subsidiary of National Stock Exchange (NSE).

The entire quantum of shares being sold to investors is NSE's holding and there will not be any new issue of shares which may see money coming into the company.

The company's chief executive Anuj Kumar said NSE decided to sell its entire holding in the company after capital markets watchdog Securities and Exchange Board of India (Sebi) directing the top equity bourse to pare its holding in the company.

The company counts on other investors including private equity major Warburg Pincus and the HDFC Group, who will continue to be invested.

The issue will open on September 21 and close of September 23. Before that, the anchor investors' portion will open on September 18, it said.

Half of the issue is reserved for qualified institutional buyers, 35 per cent to retail investors, 15 per cent to non-institutional bidders and there is a reservation of 1.82 lakh shares for employees, who will get the shares at a 10 per cent discount.

The price band has been set at between Rs 1,229-1,230 per share and the company will raise Rs 2,242 crore at the upper end of the band.

The issue comes amid a jump in IPOs lately, and is the biggest offering by size in the recent times. It also comes at a time when the markets are flush with liquidity and some of the preceding issues have been over-subscribed at record levels.

The company management said it had been working on an IPO for over eight months and made it clear that it did not get in with an eye on the current happenings.

CAMS had posted a 1 per cent rise in total income in FY20 at Rs 721 crore as the expense ratios got compressed, its chief financial officer M Somasundaram said, adding that it made up for it through an expansion in operating profit margins to 37 per cent, which resulted in the profit after tax growing 25 per cent to Rs 173 crore.

Somasundaram said the company generates healthy cash and will continue distributing 65 per cent of its profits as dividends to shareholders.

CAMS is a technology-driven financial infrastructure and services provider to mutual funds and other financial institutions.

Headquartered in Chennai, CAMS is co-owned by NSE Investments, Warburg Pincus, Faering Capital ACSYS Investments and HDFC Group.

The company claims to be India's largest registrar and transfer agent of mutual funds with a market share of nearly 70 per cent, based on mutual fund average assets under management (AAUM), as of November 2019.

The issue is being managed by Kotak Mahindra Capital Co Ltd, HDFC Bank Ltd, ICICI Securities Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd. PTI AA SP ANS ANS