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Published on 18/09/2020 12:49:29 PM | Source: Religare Broking Ltd

IPO Note - Computer Age Management Services Ltd By Religare Broking

Posted in IPO Reports| #IPO #Religare Broking Ltd

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About the Company

Computer Age Management Services Ltd (CAMS) is a technology-driven financial infrastructure and services provider operating in 7 business verticals. It has over two decades of experience in mutual funds and other financial institutions. They are India’s largest registrar and transfer agent of mutual funds with an aggregate market share of ~70% based on mutual fund average assets under management (“AAUM”) managed by its clients, during July 2020, according to the CRISIL Report. In addition, the company’s mutual fund clients include 4 out of the 5 largest mutual funds such as HDFC AMC, ICICI Prudential AMC, SBI Funds Management Pvt. Ltd. and Aditya Birla Capital. With the initiative of creating an end-to-end value chain of services, the company has grown its service offerings and currently provide a comprehensive portfolio of technology based services through pan-India network to its mutual fund clients, distributors and investors.

Further, certain services are provided to alternative investment funds, insurance companies, banks and non-banking finance companies. Its network comprising 271 service centers spread over 25 states and five union territories as of June 30, 2020, which are supported by call centers in four major cities and four back offices all having real time connectivity, continuous availability and data replication and redundancy. Moreover, it also provides services through online and mobile application.

 

Objects of the Issue

* To carry out the Offer for Sale of up to 18,246,600 Equity Shares by the Selling Shareholder;

* To achieve the benefits of listing the Equity Shares on the BSE.

 

Valuation

According to the CRISIL Report, while the growth in the Indian mutual fund industry is expected to be near-flat during FY21 on account of the COVID-19 pandemic.

The AAUMs are expected to increase after the financial year 2021. The key growth drivers of the Indian mutual fund industry are anticipated economic growth, a growing investor base, higher disposable incomes, increasing investment via SIP route, ease of investment via digitalization and increased preference of mutual funds as long term wealth creators. We believe CAMS is well placed in the industry as it has large client base, well established technology and applications, providing services across value chain, experienced management team and domain expertise which aid supports to its clients, investors and distributors growth. Over the last five years, CAMS have grown its market share from ~61% in FY15 to ~69% in FY20, based on AAUM serviced, according to the CRISIL Report. Over FY15-20, the company has delivered CAGR growth of ~13% in revenue and as well have decent ROE of 32% in FY20. On valuation front, CAMS is valued at a P/E of 36.8x FY21 annualized EPS. Going forward, we remain positive on the company’s growth driven by growth in mutual fund industry, increasing flows through SIP’s, well versed technology of the company and strong clients base. Hence, investors having long term view can subscribe to the issue.

 

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SEBI Registration number is INZ000174330

 

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